Speaking in Bulawayo last week, BAZ immediate past President
"Currently the Zimbabwean banking sector is characterised by slightly above
"The local money markets have failed to take off meaningfully, with local capital market, that is, ZSE also failing to provide an adequate platform for fundraising for economic development. This then calls for the economic players to strategise and look at means of accessing finance from outside the country. We have seen big corporates including
Guvamatanga said traditionally, the local mining sector has been financed through internal funding, shareholder equity, debt financing from various sources including shareholders loans, structured financing from buyers and syndicated loans from various banks locally and internationally.
"However, in the liquidity constrained environment characterising the country, banks in
He said there was a need for a contextualisation of the abilities of the local banking sector as well as having a clear understanding of the limitation of the local stock exchange in attracting sufficient levels of capital for the mining sector.
"It is imperative to look at the alternative sources of financing to circumvent the liquidity challenges affecting the country," he said.
Guvamatanga said some of the methods of raising capital included issuance of corporate bonds, joint partnerships and royalty funding.
Off-take finance or contract financing, escrow account arrangement and streaming arrangements were some of the sources of funding that Guvamatanga urged local companies to employ.
"The ability of the mining sector to access financing in a depressed economy like the one currently characterising the country requires that the mining companies be innovative and look beyond the border.
"The ability of the sector to attract financing requires that the laws governing mining in the country be transparent and investor friendly," he said.
Most Popular Stories
- Businesses, Investors Pressing for Green Policy
- 'The Voice' Sounds Different This Season
- NSHMBA to Rebrand With New Name, Logo
- Lower Used-Car Prices Roil the Auto Industry
- Chrysler and Google Launch Virtual Plant Tour
- Perry Wants to Skip Court for Foreign Trip
- Investors Fret Yahoo's Future, Stock Dips
- Iran Digs in on Underground Nuclear Site
- Existing Home Sales in U.S. Fell in August
- Liberty Power Helps USHCC Go Green