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Where’s the ZW$18bn rescue package?



THE ZW$18 billion Covid-19 economic recovery and stimulus package announced by the government last year to provide liquidity support to several sectors of the economy remains elusive, with Treasury now blaming businesses for their failure to convince banks to release the money.


Equivalent to 9% of the country’s gross domestic product by then, the stimulus package was meant to put Zimbabwe on a recovery trajectory following the devastating impact of Covid-19.

Out of the amount, agriculture was allocated ZW$6.08 billion, industry (working capital fund) ZW$3.02 billion, mining sector (ZW$1 billion), small and medium enterprise support fund (ZW$500 million), arts sector fund (ZW$20 million), liquidity release from statutory reserves (ZW$2 billion), health sector support fund (ZW$1 billion), broad relief measures (ZW$1.5 billion) and food grant (ZW$2.4 billion).

Industry players who spoke to The NewsHawks this week revealed that they had lost hope of accessing the package given the time it has taken.

“There is nothing, we haven’t seen any drop of that. Last time when we had a meeting we did ask Finance minister Mthuli Ncube over that and he told us that he will talk to the banks but nothing came up. I think it was just for public relations (purpose) because no one has benefited and no one has been given that money,” Zimbabwe National Chamber of Commerce vice-president Golden Muoni said.

“There is no money, there is nothing whatsoever. In real terms, there is no money. I think the government has other things which they want to attend to. To say there is someone who has benefited, I would be lying. So, it’s each man for himself, God for us all. There is no dollar, there is no cent and now given that this lockdown is continuously being extended, there is now more need for that money.”

Zimbabwe’s economy is currently struggling, with Covid-19 affecting all sectors, yet at the same time inflation is spiralling out of control.

The government this week extended the level four lockdown by another two weeks, further constraining businesses.

Victor Nyoni, chief executive officer of the Association for Business in Zimbabwe (ABUZ), said the fact that very few banks were participating in the programme made it difficult for companies to access the fund.

“I know for a fact that ABUZ members did not benefit from the fund, the reason being that very few banks are participating in that programme. I think it’s only CBZ Bank and this makes it difficult for companies to access it because it’s not everyone who banks with the CBZ,” Nyoni said.

“Government must engage all banks. You cannot force everyone to bank with CBZ. It must also work on the access modalities. Banks prefer to stay away due to certain conditions and there is no transparency with those funds.”
The government has shareholding in CBZ Bank.

Confederation of Zimbabwe Industries Bulawayo chamber late last year also revealed that its members had not received their share of the government’s ZW$18 billion rescue package.

Environment, Climate, Tourism and Hospitality Industry minister Nqobizitha Mangaliso Ndlovu (pictured) confirmed the hospitality sector had not benefitted. He said the banks were not willing to lend to the tourism sector because of its state at the moment.

“It’s something that we are aware of (that tourism players have not benefited from the fund) and we are working on something which will give the government better leeway. The Treasury is working on giving us a fund, but unfortunately, it has to be approved in Parliament,” he said.

“If anything, it might come in the budget for 2022 because it has to be approved through process. That’s the unfortunate part.”

The tourism sector was promised ZW$500 million.

Hospitality Association of Zimbabwe Matabeleland North chairperson Anald Musonza recently told state media that more businesses were now technically insolvent and could shut down anytime.

Ministry of Industry and Commerce deputy director of communications and advocacy Yvonne Gundu said: “With regards to your query, please be advised that the Covid-19 recovery package is being coordinated from the ministry of Finance.”

Ministry of Finance and Economic Development chief director of communication Clive Mphambela said the money was there, sitting in the banks.

“It’s a demand-driven fund. So anyone with a genuine Covid-related business stress which can be demonstrated to their bank should get funding. Those who have adequately demonstrated to their banks can access the fund,” he said.

“I think the challenge may be when the bank assesses a particular entity or project it may not fit the test. For example, if your business is generally doing well the bank will wonder why you are trying to borrow more money.

“So, the corporates must be able to justify the need to their bankers. When the bank is satisfied that there is a genuine need, the bank then requests the government to issue a guarantee in their favour for that loan.

“So, you can see that it was a clever facility because we didn’t want to create a situation where people just take money that they don’t need and end up using it for speculation and other things. If there is a genuine need, it will be funded. But that test is passed at the level of the bank. So if customers cannot convince their bank, then they probably don’t need the money,” Mphambela said.

Mpambela, however, would not reveal the loans that have been gazetted by the government so far, saying he does not remember the figures off-hand.

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