SA To Consider Zim Line of Credit

Finance minister Tendai Biti met his South African counterpart Pravin Gordhan Friday where it was agreed that a line of credit and budgetary support should be considered.

In a joint statement the two ministers said they had also agreed to consider encouraging the participation of development finance
institutions, including the Development Bank of Southern Africa (DBSA), to invest in infrastructure projects, particularly in energy and roads.

The two ministers said they had agreed to consider the strengthening and collaboration between the South African Revenue Service (SARS) and tax collector, Zimbabwe Revenue Authority (Zimra) with particular focus on the harmonisation of customs systems and procedures and investments in Beitbridge Border Post infrastructure.

“South Africa further committed itself to continue supporting Zimbabwe’s efforts to normalise its relations with multilateral financial institutions,” the statement said.

Two weeks ago, Biti said he would approach the South African government to fulfil the R1 billion pledge to Zimbabwe it made at an
extraordinary summit on the country in Swaziland three years ago.

At that summit South African pledged to explore a number of possible support measures for Zimbabwe, including budget support grants, a line of credit and export facilities.

Biti and Gordhan noted on Friday that Zimbabwe continued facing “significant economic constraints, including cash flow challenges
arising from revenue collections that are below target, a high debt over-hang, an uncompetitive business environment, infrastructural deficits, and limited access to lines of credit for business”.

Zimbabwe’s economy is constrained as revenue inflows are below the budget.

Diamond revenue is trickling into the fiscus and this forced Biti cut the 2012 budget to US$3,4 billion from the US$4 billion earlier projected.