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    HomeBusinessDisbursement of $18 bln economic recovery package begins

    Disbursement of $18 bln economic recovery package begins

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    Harare (New Ziana) – At least $2.5 billion has so far been released to productive sectors of the economy and the winter wheat programme under the economic recovery and stimulus package which the government availed last month, a Cabinet Minister has said.

    The government unveiled an $18 billion economic recovery and stimulus package, to assist in re-starting the economy set back by the Covid-19 pandemic.

    Industry and commerce have not been operating at optimum levels ever since the country went into the Covid-19 national lockdown in March this year, while informal businesses have had to endure forced closure.

    Finance and Economic Development Minister Professor Mthuli Ncube said, in total, the agriculture sector would get $6.08 billion in support, working capital support would be $3.02 billion while the mining sector would get $1 billion.

    Ncube said a tourism support fund of $0.5 billion for players registered with the Zimbabwe Tourism Authority was also available.

    “Implementation of the economic recovery and stimulus package has already started in earnest with the RBZ having already disbursed ZWL$2.5 billion for the productive sectors and the winter wheat programme,” he said.

    The government has set a target of producing 415 000 tons of wheat this season.

    “Other than capital grants which are being disbursed through various line Ministries, all productive sector support will be financed by banks through the normal banking channels with government providing requisite guarantees to the financial institutions based on a risk sharing model.”

    Ncube said conditions for accessing the loans included having valid tax clearances and compliance certificates from the National Social Security Authority.

    He said priority would be given to existing projects while new ones would only be considered in the health sector if they resulted in the localisation of supply chains in the production of personal protective equipment (PPEs) for the Covid-19 pandemic.

    Defaulters under previous facilities would not benefit from the funding, he said.

    “Through the risk sharing model, the banks will conduct credit assessment and due diligence of the applicants, government will provide guarantees and banks are expected to monitor and evaluate the use of the resources by borrowers to ensure that the beneficiaries will repay the loans accessed,” Ncube said.

    “Productive sector lending interest rates have been lowered to not more than 20 percent and existing qualifying loans must be restructured to allow businesses to recover. Loan restructuring will also entail review and relaxation of regulatory guidelines and benchmarks. A grace period of up to three months will be given to allow businesses to effectively recover from the effects of the Covid-19 pandemic.”

    Ncube said for small and medium enterprises to access support from their $500 million fund, they should lodge applications through the Empowerbank, Zimbabwe Women’s Microfinance Bank, SMEDCO and POSB.

    A grace period of up to 90 days would be given to SMEs with the maximum tenure of the loans being determined by the lending institutions in line with their credit policy.

    Ncube said the artists and athletes support fund of $20 million would be administered by the Ministry of Youth, Sports, Arts and Recreation.

    “Applicants and beneficiaries should submit applications for processing in line with guidelines to be issued soon.”

    New Ziana

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