26 February 2013

Zimbabwe: Chinamasa Backtracks and Says Election Funding Is Secured

Justice Minister Patrick Chinamasa has again stated that local funding for the upcoming constitutional referendum has been secured, hours after denying he made such comments to the Sunday Mail.

Chinamasa was quoted by the newspaper on Sunday as stating that some US$80 million had been secured from local firms to fund the referendum, set for March 16th.

He then told SW Radio Africa's correspondent Simon Muchemwa on Monday that he was "misquoted" and that no money was secured.

This was backed up by Finance Minister Tendai Biti who told a press conference in Harare on Monday that no money had yet been secured. He had told journalists last Friday that there was no enough time to get money from international donors, and the government would be turning to local firms.

However, Chinamasa later on Monday backtracked and said the money has been secured. The Minister, currently in Geneva, told SW Radio Africa's Muchemwa that acting-Justice Minister Emmerson Mnangagwa was set to make a statement and that "we just need to figure out the modalities on how we get this money to ZEC." He gave no other details about where the money has been sourced from.

Economist John Robertson told SW Radio Africa that if funding is sourced from within the country the money will most likely come from the Mbada diamond mining firm or from Econet.

"Econet is not only earning money in Zimbabwe. It has broadened its base across Southern Africa and its revenue source is larger than Zimbabwe's market. So they (Mbada and Econet) appear to have between them at least US$65 million that is needed," Robertson said.

He explained that very few other companies in Zimbabwe are able provide the millions required by the government on such short notice, saying that "the purchasing power of Zimbabwean consumers remains very constrained."

Robertson also speculated that there have been "few details of the agreements published because partly the government might be embarrassed to admit they can't be sure of a repayment date. And lenders could be embarrassed because they have been pressured into lending something without seeking the assurances of repayment they needed first," Robertson said.

He added: "There is caution on both sides because people are not happy about an agreement that have been forced into making."

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