Zimbabwe secures US$400 million facility from Afreximbank

Zimbabwe has secured a US$$400 million facility from the Africa Export Import Bank (Afreximbank) giving a major financial boost to the Second Republic’s programmes being implemented to stimulate economic growth. Speaking to the media here yesterday at the Afreximbank 30th Annual Meetings, Reserve Bank of Zimbabwe Governor Dr John Mangudya said the country expected to start drawing down from the facility this week.

“We have now finalised negotiating a US$400 million facility which we believe will be disbursed this week,” he said“This facility will be very critical because it will buttress and support the measures that Government has put in place to stabilise and grow the economy.

This is coming as a handy facility and timeous to ensure the measures we put in place (for economic stability) are cemented.”
Dr Mangudya said since Afreximbank opened its regional office in Harare in 1996, Zimbabwe has drawn down at least US$10 billion.

He added that the bank is now expanding its regional office through construction of a multi-million dollar building in Harare.
Zimbabwe is the third biggest shareholder in Afreximbank after Nigeria and Egypt.

Dr Mangudya said the Central Bank is running a cocktail of initiative to bring currency stability in the country.

He said the bank has since identified the major issues weakening the local currency and is in the process of addressing the problem.

“We need to put in place credible measures to increase confidence, sometimes it is lack of confidence that takes people backwards,” said Dr Mangudya.

“If you look at our country, the hyper-inflation of 2008, that demon of the past is always coming back so we need very strong policy ideas that will deal with the past and go forward.

When we have the soft local currency and the hard currency, the US dollar, people are always rational, they want to hold that which is hard as opposed to the softer currency.

“We need to ensure that policy measures are good and sustainable and increase confidence. Confidence comes from good policy measures and I hope what we have done are good policy measures that the society can now see where we are going.

“We have identified that we have the money side challenges and supply side challenges. On the supply side we need forex resources to augment what we are doing and consistently follow the market using market forces on the determination of the exchange rates.

“We are ensuring that the local currency in the economy does not flood the market. We are now at a point where we are looking for an equilibrium and we are almost there.

Added Dr Mangudya: “The past one week we have seen stability in the foreign currency market. As we draw the local currency on the market and sell it through the foreign currency interbank market that is going to ensure that the rate stabilises and there will be no movement in the price of goods and services.”

The country has in the past few months witnessed run away foreign currency exchange rates. This has triggered a wave of an increase in prices of goods and services.

Authorities have since moved in to arrest some businesses that are suspected of fuelling the price madness through forward pricing and refusal of local currency as a medium of payment.-chronicle