- December 16, 2019
- Posted in LOCAL
Finance Minister says the government is mulling provision of credit guarantee scheme to the mining sector to realise the envisaged mining sector growth by 2023.
Addressing business stakeholders at the Zimbabwe National Chamber of Commerce (ZNCC) 2019 business review conference recently, Minister of Finance and Economic Development Professor Mthuli Ncube said that the move would ensure access to capital to this critical sector whose proceeds are expected to spur broader economic growth.
President Mnangagwa in October this year launched a strategic roadmap to the achievement of a US$12 billion mining industry by 2023.
Minister Ncube said through the credit guarantee scheme Government will finance the mining of precious minerals outside gold and diamond through state owned Minerals Marketing Corporation of Zimbabwe (MMCZ).
The move is a response to representations by stakeholders who had called upon Government to consider a funding framework along the ones meant for the agriculture sector as a means to capacitate small-scale players, to optimise production.
Minister Ncube indicated that the arrangement will be borrowing the concept from empirical experiences of the command agriculture which has yielded positively in recent years particularly the 2016-17 cropping season.
“We are going to provide through MMCZ a credit guarantee scheme to guarantee access to capital, for miners who are not in diamonds or gold. They should come to us and talk about better access to capital.
“Basically we have taken what we are doing from command agriculture and apply it to mining,” he said.
The extractive sector has lately been on the spotlight since the launch of US$12 billion mining industry by 2023.
The US$12 Billion has been disaggregated to $4 billion for the gold sector, $3 billion for the platinum, half a billion for lithium sector, $1 billion for the diamond sector and $1 billion for the chrome, iron and steel sectors.
While the government is upbeat about the set target, some of the stakeholders in the sector have called it ambitious calling for improved work ethic and elevation of policies that result in the sector’s improved efficiency.
The Mines Ministry received $293, 2 million from the 2020 budget for its capacitation in terms of planning, promotion of exploration, data capturing and automation, among other key mining processes.
Minister Ncube is on record saying he was committed to capacitating small-scale miners with appropriate skills, equipment and modern technologies, improving production and transparency.
He also announced during his 2020 National Budget presentation a reduction in royalties for diamond from 15 percent to 10 percent “in order to promote investment in exploration and extraction”.
The mining sector is critical in generating foreign currency, contributing about 70 percent of the country’s forex earnings.
Source: The Herald