Parly approves BMC loan for P300million

Kenneth MatamboMinister of Finance and Development Planning, Kenneth MatamboParliament has approved a request by Botswana Meat Commission (BMC) to obtain a P300million that the Commission negotiated with Standard Chartered Bank, in an effort to speed up payments to farmers seeking cash on delivery for cattle purchased.

Farmers are typically paid after 15 days though farmers had been used to waiting for about 48 hours posing problems fro those wishing to secure payment immediately.

"I therefore move that this honourable house resolves to authorize extension of a Government guarantee for a P300million loan extended to Botswana Meat Commission by Standard Chartered Bank," said Kenneth Matambo, Minister of Finance and Development Planning in Parliament Monday.

He said, "Section 22 of the Public Finance Management Act, 2011 states that the Minister may extend a Government guarantee if the facility to be guaranteed is believed to be in the public interest. After evaluation of the BMC request for a Government guarantee and assessment of its financial performance, it was determined that a guarantee should be extended to cover the loan facility of P300million sought by the commission."

According to officials the guarantee of the loan facility will cover a period of eight years from date of signature. It is believed that in the eight year period BMC would have accrued adequate capital to operate without a need for this loan facility or would be in a position to raise the facility without seeking a Government guarantee.

"One facility would be utilized to buy cattle, feed and medicine whilst the other facility is required for working capital while BMC awaits payment from the clients. Both financing facilities have a duration of 120 days, meaning that repayment is expected after 120 days from date of drawdown. The provision of these two financing facilities would ensure that farmers are paid within the shortest possible time," said Matambo.

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