Zimbabwe: Tobacco Merchants Fail to Secure Offshore Loans From Foreign Banks

Source from:  The Herald (Harare) 22 August 2007 08/23/2007

LOCAL tobacco merchants are failing to secure offshore loans from foreign banks - a development that has seen them failing to meet the requirements of their clients overseas. Addressing journalists in Harare last week, Zimbabwe Association of Tobacco Merchants Buyers and Gwai Leaf Tobacco managing director Mr Owen Tavengwa said their foreign counterparts were the only ones who were benefiting from offshore loans. "As tobacco merchants, we are not in a position to access any offshore funds to buy enough tobacco for our foreign markets like Asia and in particular China. "Multinational companies are only able to buy tobacco from farmers and sell it at the export market a move which gives more space for outside buyers who have access to foreign funding," he said. He noted that only multinational companies and foreigners are eligible to buy tobacco at the auction floors because they have access to foreign currency. Mr Tavengwa said that last year he had an order to supply two million kilogrammes of tobacco to his Chinese clients but only managed to export 70 000 kgs worth US$1,5 million. This year, his company managed to access only US$500 000 for 100 kgs of tobacco for the export market, but it was not enough to meet the ever increasing foreign demand. "We are not represented enough on the marketing of tobacco, and foreign buyers are capitalising on that. "Foreigners are able to access offshore funding because they can get loans from their countries, which is different from our bankers who are not willing to offer offshore funding," Mr Tavengwa added. He said that they wanted to be fully supported by the Government to access offshore funds for purchasing tobacco. Enditem