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Time Bank Holding Company has proposed a US$38 billion loan to the Zimbabwean government to clear the country’s debts. The loan would be underpinned by converting 500,000 hectares of state-owned agricultural land into urban land. According to Time Bank, this land would come from the 10.8 million hectares acquired by the government under the land reform program.
The proposal involves issuing Treasury Bonds worth US$38 billion, backed by the converted urban land, to pay compensation to 13 groups of people, including former farm owners, indigenous Zimbabweans, insurance policyholders, depositors, and pensioners. Time Bank claims its proposal offers a 10% discount rate, better than prevailing rates of 20% to 85%.
“A syndicate of banks led by Time Bank will purchase the Treasury Bonds from the above-mentioned 13 groups of people for cash at a 10% discount regardless of the maturity period of such Treasury Bonds, thereby financing the payment of compensations to the 13 groups of people,” Time Bank said.
The syndicate would then purchase urban land from the government, using the Treasury Bonds to pay for it. This would enable the government to repay the bonds with interest. Time Bank explained, “This will enable the full repayment by the government of the Treasury Bonds of US$38 billion plus interest because the amount due under the Treasury Bonds will be set off against the purchase price of the urban land or urban properties.”
The plan involves subdividing the urban land into various types of stands, including residential, commercial, industrial, and agro/residential plots. About 1.1 million houses would be produced on 300,000 hectares of urban land. Time Bank noted that a syndicate of 100 banks and companies would implement the proposal.
Time Bank accused the government of allegedly pirating its proposal, which it claims is patented. The Treasury has responded lukewarmly to the proposal, prompting Time Bank to release its full proposal to explain the mechanics of the offer.
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