Banks sitting on $9bn: Mnangagwa

Emmerson Mnangagwa

VICE-President Emmerson Mnangagwa says banks are sitting on more than $9 billion as there are no takers due to the unavailability of viable projects.

The Acting President said on Wednesday that Government has engaged financial institutions to release funds to finance productive sectors of the economy and called on the generality of Zimbabweans, including youths, to come up with bankable projects which can be guaranteed by Government.

Delivering a public lecture on Command Agriculture at the Midlands State University, Acting President Mnangagwa said the projects to be financed should be part of the “Buy Zimbabwe” initiative where beneficiaries should come up with proposals to manufacture products, which are presently being imported into the country.

He said this was part of the import substitution initiatives being implemented by Government.

“We have over $9 billion, which is just sitting and is not being used. We have talked to the financial services sector to release these funds to circulate in the economy but they can only release such funds they are keeping if there are programmes,” said Acting President Mnangagwa.

“We want to support viable programmes especially coming from the youth to support import substitution under the Buy Zimbabwe initiative. We are not saying you should have money but you should have a solid proposal and then we finance the programme.”

The Acting President said the Government has put in place a menu of opportunities for locals to choose when participating in economic development.

“So it’s either you choose to be employed and you choose to employ. If you choose to employ you come with a project and we will finance you and if you choose to be employed, sit around until someone has a project and they will employ you,” he said.

The call by Government comes as lending institutions have been reluctant to release loans into the market owing to the rise in non-performing loans since the inception of the multicurrency system in 2009.

However, there has been a marked reduction in non-performing loans in the past three years as banks have been cautious in their lending.

In his 2017 Monetary Policy presentation the Reserve Bank of Zimbabwe reported the level of non-performing loans had declined from a peak of 20,45 percent in 2014 in the ratio of total loans to 7,87 percent by December last year.

The central bank attributed this to the combined impact of the various policy measures instituted by the bank and initiatives by banking institutions in 2016.

Measures included enhanced credit management systems and collection efforts, as well as disposal of qualifying non-performing loans to the Zimbabwe Asset Management Company among other measures. – Chronicle

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