News / National
Govt defends US$88 million Mbudzi interchange loan deal
16 Feb 2023 at 04:54hrs | Views
FINANCE Minister Mthuli Ncube has defended the US$88 million loan agreement with Fossil Mines for construction of the Mbudzi interchange in Harare, and claimed that there was nothing amiss about the loan.
In a gazette last week, government announced that it had signed a US$88 million loan deal with Obey Chimuka's Fossil Mines to fund the project at an interest rate of 5% per annum up to 2025.
Fossil Mines is a sister company to Fossil Contracting — one of the firms involved in the project.
Observers questioned the rationale of government borrowing at high interest rates from a company that was part of the project. Ncube had initially said the interchange would be financed from part of the US$1 billion Special Drawing Rights funds availed by the International Monetary Fund.
Speaking to NewsDay yesterday on the sidelines of the launch of the US$10 million gold facility in the capital, Ncube said: "It's not a good idea to discuss a specific agreement between two parties, this is totally wrong. Government borrows from anyone and we made an assessment and saw it appropriate to have the deal and there is nothing wrong."
As NewsDay posed a question on why the loan signed in 2021 was announced in 2023, Ncube was whisked away by his security aides.
In December, the United States government placed Fossil group chief executive officer Chimuka and two of his companies, Fossil Contracting and Fossil Agro, on its sanctions list "for their ties to the previously designated individual Kudakwashe Tagwirei and his company, Sakunda Holdings."
The Mbudzi Interchange project is expected to ease congestion at the intersection connecting the Harare-Beitbridge Highway, Simon Mazorodze Road and High Glen Road.
In a gazette last week, government announced that it had signed a US$88 million loan deal with Obey Chimuka's Fossil Mines to fund the project at an interest rate of 5% per annum up to 2025.
Fossil Mines is a sister company to Fossil Contracting — one of the firms involved in the project.
Observers questioned the rationale of government borrowing at high interest rates from a company that was part of the project. Ncube had initially said the interchange would be financed from part of the US$1 billion Special Drawing Rights funds availed by the International Monetary Fund.
Speaking to NewsDay yesterday on the sidelines of the launch of the US$10 million gold facility in the capital, Ncube said: "It's not a good idea to discuss a specific agreement between two parties, this is totally wrong. Government borrows from anyone and we made an assessment and saw it appropriate to have the deal and there is nothing wrong."
As NewsDay posed a question on why the loan signed in 2021 was announced in 2023, Ncube was whisked away by his security aides.
In December, the United States government placed Fossil group chief executive officer Chimuka and two of his companies, Fossil Contracting and Fossil Agro, on its sanctions list "for their ties to the previously designated individual Kudakwashe Tagwirei and his company, Sakunda Holdings."
The Mbudzi Interchange project is expected to ease congestion at the intersection connecting the Harare-Beitbridge Highway, Simon Mazorodze Road and High Glen Road.
Source - Newsday Zimbabwe
