According to a gazette issued Friday, the government has guaranteed a loan of about US$750 000 from CBZ Bank to Luxaflor Roses (Private) Limited under the COVID-19 Economic Recovery and Stimulus Package (ERSP) for companies.

The loan is meant to fund the procurement of raw materials for production and export of roses.

Finance Minister Mthuli Ncube said the amount is half the total package, adding that should the company fail to pay back, government will be bound to meet the repayment.

“It is hereby notified, in terms of section 300 (3) of the Constitution of Zimbabwe, as read with section 18(2) of the Public Debt Management Act [Chapter 22:21], that the Minister of Finance and Economic Development hereby issued the following:

“Guarantee, binding the Government of Zimbabwe as surety for the repayment of US$750,000,00 (50% of the facility) to Luxaflor Roses (Private) Limited from CBZ Bank Limited to finance the procurement of raw materials for production and export of roses under the COVID-19 Economic Recovery and Stimulus Package,” Ncube said in the notice.

This follows President Emmerson Mnangagwa’s announcement in May 2020, of a Z$18 billion COVID-19 support package for local businesses.

It is aimed at reinvigorating the economy and providing relief to businesses and industries impacted by the economic slowdown caused by the Coronavirus pandemic.

“The package is proportionate to the disruption the virus has caused to the national economy,” said Mnangagwa in a televised speech.

That package involves government providing guarantees of about Z$2.5 billion for bank loans accessed by industries for working capital, cushioning them from the shocks of the pandemic.

Qualifying companies apply and access loans through banks under this facility and government provide surety on repayment and would take over the repayment of the loan in case of default by the company which was given the loan.