CBZ secures US$80 m credit facility from Afreximbank
In a significant move to bolster Zimbabwe’s economic landscape, the African Export-Import Bank (Afreximbank) finalised an US$80 million facility with CBZ Bank in the Bahamas on June 12, 2024.
This strategic partnership aims to enhance trade financing and capital expenditure across Zimbabwe’s key productive sectors.
Structured with a three-year tenure, extendable by an additional two years, the facility underscores Afreximbank’s commitment to fostering economic growth in Africa during critical times.
The facility is divided into two main components.
The bulk of the facility, US$60 million, is dedicated to prime exporters and small to medium-sized enterprises (SMEs) integral to export value chains.
This allocation will finance capital expenditures for acquiring assets and machinery and provide working capital to manage inventory, supply chains, pre-export and post-export activities.
This support is crucial for sectors that drive Zimbabwe’s economy, including mining, agriculture and manufacturing.
The remaining US$20 million will fund the Afreximbank Trade Facilitation Programme Facility (AFTRAF), a non-funded line of credit designed to issue guarantees and letters of credit (LCs).
AFTRAF will mainly support importers, both SMEs and large corporations, by providing essential trade facilitation through non-funded options. This initiative aligns with the goals of the African Continental Free Trade Agreement (AfCFTA) to foster regional economic integration.
The facility is poised to integrate Zimbabwe more deeply into the continental trade network by leveraging AfCFTA’s trade finance products and services.
Economist, Tinevimbo Shava, applauded the facility as he said it will drive the economy as it targets exporters.
“This US$80 million facility from Afreximbank is a timely intervention for Zimbabwe’s economy. By targeting prime exporters and SMEs, it provides much-needed capital for sectors that are critical to our economic growth, such as mining and agriculture.
“The allocation of US$20 million to the Afreximbank Trade Facilitation Programme is a strategic move. By offering guarantees and letters of credit, it will enhance import capabilities and provide the necessary support for SMEs and large corporations to thrive in a competitive market,” he said.
Key focus areas include market expansion for SMEs, enabling local SMEs to access and compete in new markets both locally and regionally, and employment creation and resilience by building robust value chains capable of withstanding global supply chain disruptions.
Additionally, the facility aims to boost export-oriented industries to minimise the national import bill and provide targeted support for vital sectors such as mining, agriculture and manufacturing. Enhancing the capabilities of SMEs to contribute significantly to economic transformation and community development is also a crucial objective.
This agreement between Afreximbank and CBZ Bank marks a pivotal step towards sustainable economic growth and integration within Africa, reinforcing the continent’s collective economic resilience and capacity.-ebusinessweekly
