Govt seeks $600m facility for industry
Africa Moyo Senior Business Reporter
The Ministry of Industry and Commerce is negotiating a US$600 million facility with Botswana, for the local manufacturing sector, whose capacity utilisation remains below 50 percent owing to a range of factors including the US-imposed economic embargoes and antiquated production equipment.
The manufacturing sector was also being weighed down by the strong US dollar, which was being used as a transaction currency, making locally produced goods uncompetitive on the exports markets.
Market watchers and some industrialists say using the US dollar as a transaction currency, is not ideal for an economy seeking to boost production, and critically, exports.
Industry and Commerce Minister Mangaliso Ndlovu, told our sister paper Business Weekly this week that Government is engaging Botswana, whose top officials include President Mokgweetsi Masisi, with a view to getting a facility for the manufacturing sector.
President Masisi arrived in the country on Wednesday while his minister arrived a day earlier for the inaugural Zimbabwe-Botswana Bi-National Commission (BNC).
Several agreements were inked between President Emmerson Mnangagwa and President Masisi yesterday, which are expected to define a new era of cooperation between the two neighbouring countries.
However, no agreements were signed pertaining to the manufacturing sector as the negotiations are still underway, said Minister Ndlovu.
“We are still negotiating an economic cooperation with Botswana,” said Minister Ndlovu.
“It has not reached a stage where we, as the Ministry of Industry, can sign the MoU (Memorandum of Understanding). But we are working on it; there is good progress. We will also discuss it as well (during the BNC meetings).
“We are not included in the signing (that took place yesterday) but we (were) part of the ministers’ meetings and it’s an exciting mission really because the agreements that are on board include one of financing so, we expect also to unlock some funding for our local industrial retooling programme. It’s in the range of US$600 million.”
Minister Ndlovu said apart from the financing facility, the mere fact that the two neighbours “improving relations” are cause for celebration.
He added that it is through cordial relations that Botswana and Zimbabwe are now discussing “possible trade issues”.
The little trade taking place between the two countries is in favour of Gaborone, despite Harare being more industrialised than its neighbour.
Without giving statistics, Minister Ndlovu said: “We believe we can do much more than our current levels of trade.”
Last year, trade volumes “improved compared to the last four years or so”, and Minister Ndlovu believes it is a reflection of the improved relations between the two countries.
“You would know that under the old men (former President Mugabe) and (former President) Khama, there was really nothing much.
“But when we were looking at it, 2018 was really quite good and we hope to specifically improve on our exports to Botswana markets,” said Minister Ndlovu.
Zimbabwe and Botswana had frosty relations during former Presidents Robert Mugabe and Seretse Khama Ian Khama’s tenure.
The two would publicly lash each other over policy and even management of their economies.
But enter President Mnangagwa in November 2017, the relations immediately became cordial.
President Mnangagwa visited Botswana in February last year on a State-visit and held fruitful engagements with then President Khama.
Said former President Khama during that State-visit: “Mr President, Botswana remains ready to work with you and the people of Zimbabwe, as you embark on this development journey. My participation at your inauguration ceremony was essentially an expression of my personal desire and that of my Government to work closely with you to deepen our bonds of friendship.
“Equally, my invitation to you to visit Botswana, which you have graciously honoured, was aimed at providing the necessary platform for us to explore further avenues for strengthening our mutually beneficial relations.”