Mangudya Proposes Using Chinese Yuan To Repay Zim-Loan

Outgoing Reserve Bank of Zimbabwe (RBZ) Governor Dr John Panonetsa Mangudya has proposed using Chinese Yuan, to repay a USD$98 million dollars loan from Brazil.

The United States of America sanctions which include Zidera resulted in complications with repayments for the US$98 million Brazilian loan facility under the More Food Africa programme, according to Foreign Affairs and International Trade Minister Dr Frederick Shava.

Ambassador Shava revealed this development to TechnoMag during a courtesy call by visiting Brazilian Secretary for Africa and the Middle East in the Ministry of External Relations, Ambassador Carlos Duarte in Harare.

Ambassador Shava said Zimbabwe was grateful to Brazil for the 15-year loan facility which came during the late President Robert Mugabe’s reign in 2015 to support over 22 000 small-scale farmers with equipment, including irrigation kits, tractors and fertiliser spreaders.

“The Reserve Bank of Zimbabwe Governor proposed that the Brazilian bank, handling the More Food International Programme payments, Banco do Brasil, open a Yuan account with the Chinese bank in order to enhance its corresponding banking relationship with our AFC Commercial Bank. We are still waiting for the response to this request,” revealed Ambassador Shava.

Ambassador, Dr Shava told Amb Duarte that Zimbabwe was committed to settling its obligations under the loan agreement as it was in its interest to do so, so that the country benefits from the second phase of the facility.

This saw Zimbabwe lose opportunities of over US$40 billion due to the United States sanctions in place for over two decades now.

The Brazilian Ambassador, Duarte is in Zimbabwe as Head of a delegation for the first session of political consultations between the two countries.

Shava reiterated that the sanctions are behind the failure of re-paying the loan.

“The Government of Zimbabwe and its people are sincerely grateful to Brazil for the expression of this mutual support. I regret, however, that there have been challenges in repayments for the loan and interest for the equipment supplied to Zimbabwe,” Dr Shava added.

“This was and is due to complications associated with the sanctions imposed on Zimbabwe by the US and that tended to slow down or complicate our repayment programme.
“An attempt by our commercial bank, the AFC Commercial Bank, to remit funds in January 2023 was not successful because the funds were returned by the United States immediately to the intermediary bank, citing their international compliance policy, that is, compliance with the sanctions regime.”

Ross Moyo

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