Government of Zimbabwe is set to raise ZWL$ 1,550 billion through the issuance of Treasury Bills (TBs) in order to finance unspecified public programs, it has emerged.
TBs are financial instruments issued by the government into the market to raise funds for public spending and are often deemed secure.
The Reserve Bank of Zimbabwe (RBZ) has since published a notice for the issuance of the TBs which have 2-year tenure at a coupon rate of 18 percent per annum payable semi-annually.
“The Reserve Bank of Zimbabwe (RBZ) hereby invites investors, including but not limited to pension and provident funds, insurance companies, mutual funds, commercial banks and other interested institutions as well as individuals in Zimbabwe, to subscribe for the abovementioned bond,”
“Interest is payable at the Reserve Bank of Zimbabwe, Harare, half-yearly on the following dates 20 February and 20 August until maturity of the bond through ZETSS to the registered bondholders through the nominated Custodian bank,” the Bank said.
Government is currently pursuing various developmental and infrastructural projects across the country which includes construction of roads, dams and power generation.
However, during the first half of the year, government surpassed its capital expenditure targets by spending ZWL$67.4 billion, against a target of ZWL$58 billion.
There are concerns that the latest TBs issuance will increase the domestic debts which stood at ZWL$20.9 billion as at beginning of second quarter 2021.
The development comes barely a month after the Finance and Economic Development Minister, Professor Mthuli Ncube emphasized the need to ‘stay the course’ in managing expenditure hence the decision against a issuing a supplementary budget.
