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Zimbabwe: Govt in Bid to Boost ExportsTuesday, January 20, 2015 > 09:20:24
The Government has stepped up efforts to capacitate the Export Credit Guarantee Corporation whose major role is to boost exports. According to the Insurance and Pension Commission, plans to recapitalise the organisation were now advanced.
"Recapitalisation initiatives for Export Credit Guarantee Corporation were at an advanced stage by the time of compilation of this report," said IPEC in its latest report.
Sources close to the development said that the recapitalisation of the corporation, a subsidiary of the Reserve Bank of Zimbabwe, was going to be tied to the recapitalisation of the central bank.
There is consensus between the Ministry of Finance (and Economic Development) and the RBZ that the corporation be fully capacitated to resume its role as growth in exports is one of the key issues to the success of the Zimbabwe Agenda for Sustainable Socio-Economic Transformation," said the source.
Officials at the corporation declined to comment.
The corporation was around 2012 prohibited from handling any new business due to its failure to raise the minimum capital required.
Since then it has been working on the business that it had secured prior to its suspension from handling new business.
At its peak the corporation, which was established around 2000, was responsible for offering local exporters export credit insurance which covered political and commercial risks with the political risk covering wars, civil uprisings, moratorium and import exchange controls associated with the buyer's country.
Commercial risk included buyer insolvency, buyer's protracted default and non-acceptance of goods, leading to non-payments of goods supplied.
The cover was for both regional and international markets such as Zambia, Malawi, Namibia, Kenya, Botswana, Germany, Italy, United Kingdom, Japan, Australia, France and Belgium.
Apart from offering export credit insurance, the corporation also provided domestic credit insurance, construction bonds and guarantees, customs bond and pre-shipment export finance to banks and other financial institutions.
The corporation also forged strategic alliances with the Zimbabwe National Chamber of Commerce, Confederation of Zimbabwe Industries and ZimTrade to facilitate the resurgence of the export sector.
Together with Zimnat Lion, it also introduced a comprehensive export insurance package for exporters trading through bonded warehouses around 2001.
The facility was a one-stop shop for exporters.
Risks covered under the facility included transit, fire, consequential loss, political and commercial ones.