Botswana to jumpstart Zimbabwe’s ailing economy
Botswana government has decided to resuscitate the P500 million-credit facility extended to Zimbabwe’s Short Term Emergence Recovery Programme (STERP) in 2009.
This was revealed by Minister of International Affairs and Cooperation, Vincent Seretse this week. Seretse stated that former President Ian Khama expressed the commitment of Botswana Government to resuscitate the credit line.“We had signed on our side but Zimbabwe could not sign because of the challenges that they were facing. When President Emmerson Mnangagwa visited Botswana he made enquiry about it. The then President Khama promised that it would be dealt with and as we speak relevant ministries are busy with it.
“We are hopeful that in few months’ time everything would be concluded,” said Seretse who was appointed to head the foreign affairs ministry last week. He stated that the draft agreement was submitted to Zimbabwe in April 2011.
Botswana government would provide a partial guarantee for the lines of credit while Zimbabwe would provide a counter guarantee and indemnity to Botswana for the risk or exposure. In addition, the Export Credit Insurance Company Botswana (BECI) will enter into subsidiary finance guarantee agreements with participating local banks.
The two countries have reached an agreement that 70 percent of the resources will go towards the manufacturing sector while the remaining 30 percent will go towards other sectors. The Bilateral Investment Promotion and Protection Agreement (BIPPA) was signed in March after the two governments recognised opportunities for increased investment in the two countries and a need to conclude the agreement in the shortest possible time.Seretse who was addressing the media at his office in Gaborone on Wednesday this week said Zimbabwe’s economy has not fully recovered as some international investors have not returned to the country in full force. The minister stated that maybe a major shakeup could be expected after Zimbabwe’s elections expected later this year. Seretse explained that the investors want to see if indeed the elections would be free and fair and observe what would happen there afterwards. “When Mnangagwa was here he explained that everyone is welcome back to Zimbabwe. He promised free, fair and credible elections. That was the highest stake the president has put on the table. He has invited SADC and international bodies to freely come to Zimbabwe and observe the elections. This should motivate investors,” the minister said. According to the minister things are shaping up for Zimbabwe as the country has also been invited to come back into the Commonwealth. It was suspended in 2002 over political violence against opponents of former president, Robert Mugabe regime. Membership of the Commonwealth brings both economic and political support.