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Afreximbank To Loan $1.5b To Zimbabwe And Provide Guarantees To Foreign Investors

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Afreximbank

The African Export Import Bank (Afreximbank) said they will avail a loan to the tune of $1.5 billion to Zimbabwe to assist with the economic recovery process.

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The president and chairman of Afreximbank Okey Oramah visited president Mnangagwa here in Harare. The bank pledged to continue to support Zimbabwe as they have even when the country was persona non grata (or simply unwelcome, got to learn something new) in the west.

The bank did not just avail the $1.5 billion loan but will also provide guarantees to foreign investors coming to the country. The bank realises that there may still be a negative sentiment in foreign investors because of the history of our beloved country. The guarantees should serve to remove country risk for investors and will likely encourage them to come.

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Concerning the loan and the guarantees Mr Okey Omarah said,

We also discussed a number of other areas that will involve additional investment from us for something that will be in the order of $1 billion to $1.5 billion that will include certain kinds of guarantees to encourage investors to come into Zimbabwe this time.

It gets better. If you recall, Dr Mangudya, the RBZ governor announced that the central bank was negotiating for a $600m line of credit from Afreximbank back in August. The credit line was to be an enhanced nostro stabilisation facility to manage the cyclical nature of Zimbabwe’s foreign exchange receipts.

That nostro stabilisation facility has been finalised.

The $600m facility is not included in the $1.5 billion loan mentioned above. The $1.5 billion will be over and above the $600m.

The bank will also avail a further $150m as a nostro stabilisation facility for struggling banks and to address the liquidity challenges in the country.

I must say, all this brings hope to the optimist in me. Here we have a large multilateral financial service organisation guaranteeing investors coming to Zimbabwe that should something happen to their investment, the bank will bear that loss.

This coming after the announcement that the Indegenisation Act which required those foreigners to give up control (51% ownership) of their companies is as good as repealed.

I fail to see what else would hold a foreign investor back from investing in the country if they see an opportunity now.

I might be too excited right now but I see a good 2018 folks, or at least better than 2017. I know this is all debt and debt has interest attached but if investment does flow into the country and production increases then the loans would have been worth it.

RBZHarare

The Reserve Bank of Zimbabwe (RBZ) is the central bank of Zimbabwe. Its offices are located at number 80 Samora Machel Avenue in Harare. The Reserve Bank of Zimbabwe operates under the Reserve Bank of Zimbabwe Act, Chapter 22: 15 of 1964. The Act provides... Read More About RBZ

Harare formerly Salisbury is the capital of Zimbabwe. It is the seat of Government, the industrial hub and commercial centre for Zimbabwe. The city was founded by the Cecil John Rhodes-led Pioneer Column in 1890 and named Salisbury. The name was only changed to Harare... Read More About Harare

5 thoughts on “Afreximbank To Loan $1.5b To Zimbabwe And Provide Guarantees To Foreign Investors

  1. Positive development indeed… Question is will the old habits die or will feed and corruption prevail as has been the norm…I need to see laws enacted so that the afore mentioned problem can be taken to court if necessary and not published on the front page of tomorrow daily with absolute impunity

  2. great. but remember that we pay this 2.1 billion plus the 200 million. at 2% over maybe 10 years . not the government so imma be honest mangudya tiudze what exactly you are doing how you are spending it etc. weve been down this road before and eneded up over 10 billion in debt

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