9 August 2012

Zimbabwe: Senate Ratifies Protocols

SENATE yesterday ratified three protocols of a loan facility worth US$380 million from the Export-Import Bank of China.

The House of Assembly approved the same protocols on Tuesday.

The protocols will now be sent to President Mugabe for his assent. Steering the protocols in the Senate, acting Finance Minister Gorden Moyo, said the loans were affordable and developmental.

The first protocol relates to the rehabilitation of Victoria Falls International Airport to the tune of US$150 million.

The project, to be spearheaded by the Civil Aviation Authority of Zimbabwe, was signed on April 5 this year.

It is part of Zimbabwe's preparations for the United Nations World Tourism Organisation General Assembly to be held in the resort town. There was also a US$141 million loan facility from the same bank on the development and rehabilitation of municipal water and sewage treatment works for the City of Harare.

The third protocol relates to a US$89 million loan facility on a medical equipment and supplies project.

Minister Moyo said the money was cheap adding that local bank interest rates were too high.

For the airport, the loan will attract two percent interest per annum, while both management fee and commitment fee attracted 0,5 percent respectively and will be repaid over 20 years.

For the City of Harare, the loan will attract about four percent and will be paid over nine years while the loan for medical equipment will cost two percent per annum with management fee pegged at 0, 5 percent over 15 years. Parliament had to be recalled to ratify the agreement as China will next month evaluate all its international deals and cancel those that have not been ratified, said Minister Moyo.

Senators across the divide endorsed the loans saying they were developmental.

Rushinga Senator, Cde Damian Mumvuri (Zanu-PF), hailed the loan facility for the airport saying it was long overdue.

"We would want to welcome this project and the loan facility considering that lines of credit from the Bretton Woods institutions have not been forthcoming. We hope the money will be put to good use," he said.

Zanu-PF Senator for Masvingo, Cde Minah Mandava, said the loans were welcome because they were affordable.

She said Zimbabwe would be able to repay the loans because of their affordability.

Chikomo Senator Morgan Femai (MDC-T), said the loans were meant to develop the country.

"Our economy is going to improve because of these loans. As for me I don't care where the loans come from as long as they come to develop our country," Senator Femai said.

He said the loan facility for the City of Harare was a timely intervention considering that the city had been affected by cholera and typhoid. However, other Senators questioned how Government was going to repay the loans when it was already burdened with other outstanding debts.

They also queried the bank that provided the loan was also going to provide the contractor for the airport.

The legislators also asked if Government was going to get the 10 percent money required to finish each project. Minister Moyo said the airport loan facility was a concessionary one which would come with conditions set by the creditor.

He also said the loan facility for Harare City Council was meant to address the water challenges facing the capital city.

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