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(HERALD) Bank invests US$400m in Zim

Bank invests US$400m in Zim
By Bright Madera

THE African Export and Import Bank has invested a cumulative US$400 million into the Zimbabwean economy since the beginning of the year, a senior official has said. Afreximbank regional manager (Southern Africa), Mr Gift Simwaka told Herald Business that the amount is shared between the Government and the private sector.

“Since the beginning of the year, I can say we disbursed approximately US$400 million cumulatively. We have provided direct facilities to cotton farmers and miners and we are working on a new scheme to finance the telecommunication sector,” said Mr Simwaka.

Afreximbank is one of the regional financiers, which has continued to support Zimbabwe despite the country’s deteriorating credit worthiness.

Last month, the bank in partnership with the Government unveiled a US$100 million line of credit facility and the partners have since selected four banks to initially disburse US$25 million.

Mr Simwaka said Zimbabwe requires a sizeable amount of money to revive the economy but the long journey has to start somewhere, thus coming up with the US$100 million loan facility.

In February this year, the bank unveiled a US$150 million loan facility to mining houses meant to upgrade their infrastructure.

The facility was unveiled under the financial institution’s sponsored Precious Metals Export Backed Prepayments Facility “designed exclusively for Zimbabwean gold and platinum producers”.

Zimbabwe immediately requires an estimated US$2 billion to recapitalise companies to boost production from current levels of about 45 and 55 percent on average.

Mr Simwaka added that the bank would continue to support Zimbabwe and more loan facilities would be unveiled as and when the funds are available.

There is a strong demand for working capital in Zimbabwe as the country is recovering from the decade long economic recession.

Shortages of liquidity on the domestic and international markets have made it very difficult for the country, which is perceived to have a significant sovereign risk and a lower credit risk rating, to access the much needed funds for capitalisation.

Meanwhile the Cairo-based lender is working on a country risk guarantee facility and they are also working on a comprehensive framework to improve the country’s credit worthiness.

Early this year, the bank announced that it had budgeted US$1,2 billion for infrastructure development in Africa and Zimbabwe still stand a chance to benefit from these funds.

Afreximbank has also agreed to guarantee the raising of US$50 million, through Diaspora bonds to fund projects identified under the country’s economic revival plan.

By close of the year, it is estimated that the bank would have invested US$600 million into the country as one or two more facilities are expected before year-end.

Labels: AFREXM, BANKING, GIFT SIMWAKA

posted by MrK @ 4:48 PM