[caption id="attachment_3409" align="aligncenter" width="1014"]
File Picture[/caption]
GFMM desk: On Monday (January 6, 2020) Zimbabwe's largest bank CBZ issued two bonds to raise $ 80.6 million to spend money on corn and soybean cultivation. Because the country is facing another drought that could further worsen the economic situation.
The United Nations warned last week that South Africa was facing a second consecutive weak crop due to the rains this year. For millions already, last year's drought and the worst economic crisis of a decade.
CBZ said in a release that it intends to raise 500 million Zimbabwean dollars ($ 30.6 million) to purchase seeds, fertilizers and chemicals for corn and soybean production.
The bond has a tenor of 270 days and an interest rate of between 15% and 18%.
CBZ said a second $ 50 million dollar bond with the same tenor tried to raise money for import of chemicals and fertilizers that were not available locally, CBZ said. The bank will pay 9.5% interest.
Maize is the main crop of the country, while soybean is used for cooking oil and animal feed.
Under a new government-backed program to ensure food security, CBZ buys farm products and mandates farmers to buy them to provide their vouchers. The bank will then recover its money from farmers who dedicate part of their crop. Bonds are guaranteed by the government.
Zimbabwe has crossed half way through the summer harvest season, but the rainfall has been minimal and has raised fears that the government may not meet its growth target of 3.1% this year. Agriculture accounts for 17% of the country's gross domestic product.
[caption id="attachment_3410" align="aligncenter" width="1014"]
File Picture[/caption]
Poor rainfall will probably prolong the daily power cut of 18 hours because the dam's water level at the largest hydroelectric power plant is essentially low.
According to the UN, half the population of Zimbabwe's 8 million people will need food assistance this year.
Zimbabwe is a landlocked country located in Southern Africa, between the Zambezi and Limpopo Rivers, bordered by South Africa, Botswana, Zambia and Mozambique. The capital and largest city is Harare. The second largest is Bulawayo. A country of roughly 14 million people.
Source: Online/SZK
Comment Now