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Offshore loans elude local firms

17 Oct, 2020 - 00:10 0 Views
Offshore loans elude local firms

The Chronicle

Oliver Kazunga, Senior Business Reporter
THE illegal sanctions imposed on Zimbabwe by the West continue to work against efforts to grow the economy as businesses fail to access offshore loans at concessionary rates.

Zimbabwe National Chamber of Commerce national vice-president Mr Godwin Muoni said this in an interview with Chronicle this week.

The sanctions have seen Zimbabwe, for close to two decades, being isolated from the international community, causing untold suffering to Zimbabweans as the economy waned.

However, President Mnangagwa has, since he assumed office in November 2017, been on an international re-engagement drive to thaw the relations with the erstwhile enemies.

Mr Muoni called on the lifting of the sanctions in order to promote the economic revival efforts being pursued by the Second Republic.

“Sanctions have done a lot of damage to the economy and lives of the ordinary Zimbabweans, and they must be removed like yesterday.

“The embargo was put for a certain purpose and the purpose is for the country not to progress economically and that has affected the entire economy including the manufacturing sector.

“As a result of sanctions, local businesses are not able to access cheap money offshore and foreign direct investment has not been forthcoming,” he said.

Mr Muoni said the money that Zimbabwe can access during this sanctions era is expensive because financiers and investors perceive the country as a high-risk destination.

This, Mr Muoni said, renders local enterprises uncompetitive in terms of production if compared with regional counterparts.

“For example,” he said, “our banks cannot give us (industry) cheap money because they are also not accessing cheap money on the international market. Zimbabwe is perceived a risky destination for investment, so whoever is giving money to Zimbabwe will put a very high premium and this is affecting the economy heavily.”

The ZNCC vice president said the sanctions have also affected the growth of small and medium-scale enterprises (SMEs).

“Sanctions are real and have also affected SMEs’ growth because there is no research and development because such initiatives have to be funded by international financiers such as IMF (International Monetary Fund), World Bank. We have not been able to access cheap money and repay the loan which then also makes us eligible to borrow,” said Mr Muoni.

In this context, he said Zimbabwe’s economy has over the years lost potential investments worth billions of dollars.

“The entire economy is not working because what has happened is at Independence, we inherited a lot of old machinery in companies such as Dunlop, which is supposed to be supplying every tyre in this country,” said Mr Muoni.

“Now because of sanctions, that company cannot attract fresh capital to replace the old plant that is there because that company is not working and so are other strategic firms like Zisco. How much money are we as a country losing importing from as far as Japan or India?”

He said in some instances Zimbabwe has not been able to attract potential investors because the moment they set up investments in the country, they risk being put on sanctions as well.

“And if not put on sanctions list, there is no certainty that as an investor, your return on investment will be recouped and after how long,” said Mr Muoni.

Zimbabwe is gearing up for the first anniversary of the Sadc Anti-sanctions Day which has seen the country getting the necessary support from the region and other progressive forces, in calling for the lifting of the illegal embargo imposed by the West.

In addition, the punitive measures have also been condemned by the African Union and the United Nations.

Sadc leaders last year declared October 25 as Sadc Anti-sanctions Day as a show of support for Zimbabwe against Western sanctions. — @okazunga

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