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.
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.
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Indegenisation Act which required those foreigners to give up control (51% ownership) of their companies is as good as repealed.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.