Chanakira's bank now meddling in politics
FINANCE Minister Tendai Biti’s decision to delay the distribution of a US$510 million loan from the International Monetary Funds (IMF) until a new budget will slow down the pace of economic recovery, a Zanu PF linked financial institution said Tuesday.
In its weekly market report, Zanu PF linked Kingdom Financial Holdings Limited (KFHL) said Biti’s position could prolong the current liquidity crunch.
Former Finance Minister Hebert Murerwa and Nigel Chanakira owned Kingdom Financial Holdings is supposed to have been siezed alongside other business units of Kingdom Meikles Africa Limited, but the bank is now being used by Zanu PF to give party line financial signals for a political agenda.
“With the Finance Minister saying the funds would only be used under a new budget … it may be another four months before the money is used as a new budget would only come into effect with the beginning of a new year,” KFHL said. “This may mean that the liquidity crunch will continue and it would take longer for companies to increase capacity utilisation to acceptable levels.”
Biti, after originally saying Zimbabwe will reject the loan because it cannot afford the interest on repayments, staged a major climb-down last week but insisted the money would only be used next year.
Biti said “the bulk of the money” would be used towards infrastructure development — mainly roads, information communication technology, and water “but not anything in the short term”.
“Another amount would then be used for lines of credit for exporters. Another amount would then be used for budgetary support where we may use the money to have a one month window of let’s say US$60 million to meet recurrent expenditure,” the minister said.