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Reserve Bank of Zimbabwe gets $600m Afreximbank loan

by Staff Reporter
29 Dec 2017 at 06:56hrs | Views
The Reserve Bank of Zimbabwe's (RBZ) exchange control division has approved and registered the bank's $600 million loan facility from the African Export-Import Bank (Afreximbank), as efforts by President Emmerson Mnangagwa to turn around the economy gather momentum.

The facility is in two tranches of $150 million (Tranche A) and $450 million (Tranche B).

According to NewsDay, a letter dated December 21 to Afreximbank's regional manager for Southern Africa Gift Simwaka, director Exchange control Farai Masendu said the offshore loan facility was approved on condition that the $150m would attract an interest of 6% per annum, while the $450m would come at a cost of 6,5% per annum.

Masendu said the $150m should come at a tenure of 36 months, while the $450m will have a tenure of 60 months. The facility is guaranteed by the Ministry of Finance and Economic Development.

The loan is meant to finance existing facilities, pre-financing gold exports and payment of fees and costs.

"Exchange Control is also agreeable to the operation of the offshore account by the Reserve Bank with Afreximbank for the purpose of receiving and facilitating loan repayments. In addition, a finalised term sheet and loan agreement should be furnished to Exchange Control," Masendu said.

Two weeks ago, Afreximbank's president and chairman of the board, Benedict Oramah, met Mnangagwa where the bank pledged to assist Zimbabwe in its re-engagement efforts with the international community.

Oramah said Afreximbank's support programmes to Zimbabwe included the finalisation of a $600 million line of credit facility to enable the government finance trade and trade-related projects.

He said the Cairo-headquartered bank was currently processing funded and unfunded facilities for Zimbabwe amounting to between $1m and $1,5 billion.

The facilities included a country risk and investment guarantee programme, which would help the new government attract foreign direct investment into critical sectors of the economy and a $150m line of credit confirmation facility to enable commercial banks process the imports of some essential goods.

Oramah said the bank was willing to support the government's industrialisation programme, through financing of the construction, expansion or renovation of industrial parks/special economic zones, revival of some industries that were adversely affected by the international sanctions on the country and development of the natural resource sectors through local content programmes that would ensure that significant proportions of the value from natural resources were retained in Zimbabwe.

Source - Newsday