A consortium of financial institutions led by the Jewel Bank of Zimbabwe has launched a tender to raise a further Z$20bn for the Grain Marketing Board to fund the procurement of grain from local farmers and the international markets.
The tender, which is the third in a space of two and a half months, is aimed at propping up the country’s shrinking grain reserves.
Two grain bills seeking to raise a combined Z$38 billion were floated by the Jewel Bank on behalf of the GMB last November and December, which were, however, oversubscribed.
“GMB intends to raise funds through a grain bills issue to finance the purchase of grain locally and from international markets,” the managing director of Jewel Bank, Nyasha Makuvise, says.
The 90-day tender, which is also managed by a number of banking institutions following the clinching of a Z$226bn deal with the GMB, opened for just a few hours and closed on the same day.
The bills enjoy a liquid and tax exemption status.
The interest rate for investors will be discounted on a tender basis while payment will be on allotment.
The grain bills have an irrevocable government backing while they are also accepted as collateral for overnight accommodation by the Reserve Bank of Zimbabwe.
However, the indebtedness of the grain procurement authority could not be ascertained as officials refuse to disclose any details.
Banking sources, however, say the GMB owed some financial institutions in excess of Z$250bn arising from previous grain bills.
Analysts have hailed the development as a milestone in a bid to turnaround the GMB since it had, over the past few years, fuelled side marketing because of its failure to offer competitive prices to farmers.
Zimbabwe is reeling under the effects of two consecutive droughts and the destruction and confiscation of white-owned farms, which have left the country with very limited grain reserves.
The issuance of grain bills is part of the aggressive campaign to resuscitate parastatals, which are facing serious operational constraints.
The floating of bills has become one of the most successful ways that is being used by the government to raise money for operations of parastatals.
Apart from the grain bills, other similar instruments on the market include petrofin bills, which are used to raise money for the National Oil Company of Zimbabwe, megawatt bills for the Zimbabwe Electricity Supply Authority’s rural electrification programme and the agro-bills to fund the purchase of inputs for resettled farmers.
A consortium of banks comprising the Jewel Bank, Metropolitan Bank, African Banking Corporation, Interfin Merchant Bank, Syfrets Corporate and Merchant Bank, Trust Bank and First Banking Corporation manages the bills.