Africa-Press – Zimbabwe. IME Bank Holdings has unpacked its proposed US$38 billion syndicate loan to the government to clear its domestic and foreign obligations.
The plan, which is backed by State land, will improve confidence of local and foreign investors in Zimbabwe, according to Time Bank.
According to the financial institution, the money raised will be used to compensate 13 groups that include former farm owners, pensioners and the country’s multilateral and bilateral creditors.
Time Bank touts the proposal as part of a homegrown solution, which meets local and international standards.
It said the loan would utilise local resources and enable value addition to Zimbabwean products before export.
Its proposal is anchored on the conversion of 500 000 hectares of State land to urban land and the issuance of Treasury bonds.
According to the plan, government has to issue Treasury bonds of US$38 billion backed by 500 000 hectares of urban land.
A syndicate of banks led by Time Bank will purchase the Treasury bonds from the above-mentioned 13 groups of people for cash at a 10% discount, regardless of the maturity period of such Treasury bonds.
The syndicate of banks will then use Treasury bonds to buy land from the government. Resultantly, the 13 groups would be paid and the government will be debt-free, without borrowing from the central bank or increasing taxes for existing taxpayers or disturbing macroeconomic stability.
We see this proposal as worth pursuing if the country is keen to resolve its external debt and normalise relations with its creditors.
Time Bank’s proposal entails payment of foreign creditors to unlock cheap lines of credit to reboot the economy.
Zimbabwe is working on a structured dialogue process to normalise relations with foreign creditors.
If Time Bank’s claim that its proposal has been pirated is anything to go by, we condemn in the strongest terms such regressive conduct.
In a notice last week, Time Bank said: “While Time Bank was waiting for the government’s approval of its proposal, Time Bank’s proposal was pirated, resulting in the violation of Time Bank’s patent. Time Bank hopes that the issue of such violation of its patent will be resolved fairly, so that the project moves forward.”
These are serious allegations that require an investigation, as it has the potential to put the government in a bad light. It makes the government an aggressive policy-maker intend on reaping where it has not sown.
However, we should not, as a country, drop the ball. The bigger picture is the need to normalise relations with multilateral and bilateral financial institutions.
At the outset of the second republic, President Emmerson Mnangagwa exhorted Zimbabweans to put all hands on deck to help extricate the country from pariah status.
This has given rise to the mantra nyika inovakwa nevene vayo, which means a country is built by its citizens. We see Time Bank’s proposal as a commitment by the private sector to provide solutions to the seemingly inextricable challenges afflicting the economy.
We urge the government to compare notes with Time Bank so that the external debt is dispensed with. As outgoing African Development Bank president Akinwumi Adesina said, “ Zimbabwe cannot run up a steep hill of economic recovery carrying a heavy backpack of debt”.
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