Old Mutual, NSSA Buy Zimbabwe Bond Used to Finance Ballot

Zimbabwe raised $20 million from a “voluntary bond” sold to Old Mutual Plc (OML)’s local unit and the National Social Security Authority to help finance a referendum on the constitution, Finance Minister Tendai Biti said.

The 365-day Treasury bill pays a coupon of 7 percent, he told reporters today in the capital, Harare. Government agencies estimate the referendum scheduled for March 16 will cost $85 million, he said. NSSA is a state-owned pension and social security fund.

Zimbabwe is seeking funds from international donors to help pay for elections that may cost $132 million and could be held as early as July, Biti said. This week’s referendum paves the way for voting and an end to a four-year power-sharing government between the Movement for Democratic Change and President Robert Mugabe’s Zimbabwe African National Union- Patriotic Front.

Paying for the election will be a “real challenge,” Biti, secretary general of the MDC, said. The “economy remains depressed with funding challenges from both public and private sectors.”

Government revenue rose 13 percent to $277.2 million in February from the previous month, exceeding a target of $249.8 million, Biti said. Spending climbed 46 percent to $329.9 million in the period, he said.

Zimbabwe’s exports amounted to $524 million by Feb. 22, with minerals accounting for 70 percent of proceeds, tobacco accounting for 13 percent and manufacturing making up 11 percent, Biti said. Platinum dominated mineral exports, earning $143.7 million, followed by diamonds at $117.2 million and gold revenue reaching $86.4 million.

The country’s economy may grow about 5 percent this year, up from about 4.5 percent last year, Biti said in January.

To contact the reporters on this story: Brian Latham in Johannesburg at blatham@bloomberg.net; Godfrey Marawanyika in Johannesburg at gmarawanyika@bloomberg.net

To contact the editor responsible for this story: Nasreen Seria at nseria@bloomberg.net

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