Story by Stanley James, Business Editor
ZIMBABWE’S productive sectors push for expansion has received a major boost as the Africa Export- Import Bank (Afreximbank) and a local bank, Central Africa Building Society, (CABS) signed a US$40 million facility to support firms.
Afreximbank has revealed in a statement this Saturday that the three-year trade facility was signed on the sidelines of the ongoing Inter- Africa Trade Fair (IATF) 2023 in Cairo, Egypt.
The agreement signed by Afreximbank’s vice president for finance, administration and banking, Mr Denis Denya and CABS managing director, Mr Mehluli Mpofu is also aimed at bolstering the country’s productive sectors, mainly agriculture, mining and manufacturing.
Terms of the transactions seen by the ZBC News indicate the facility will also benefit over 500 small to medium enterprises, with 75% being women and youth-led sectors in terms of loans at favourable rates.
The business community welcomed the development and explained the importance of rolling out trade facilities on export growth.
AE electrical sales director, Mr Reginald Mawire said, “Transactions of such a nature are highly welcome. Remember, our industry needs funding for retooling as the ongoing capital expansion is finance oriented. Therefore, it means such a facility will also provide the basis for on-lending to productive sectors that need fresh funding thereby enabling the revival of the economy. Given its focus on productive sectors, it means we are likely to foresee continued growth of output that can also translate into increased employment opportunities. It comes at a time when clarity has been revealed about the course of a multi-currency system that has also calmed markets and enabled banks to revive loans.”
“The thrust of export growth is in motion, but the key question is on whether the industry has that financing to boost market opportunities on the internal and external front. Given the magnitude of funding requirements to do this, banks must play a key role and given the fact that regional lenders are teaming up with banks to finance production, it brings confidence however the term of the lending needs to be structured in a manner that also balance viability while enabling industries to grow or recover. So, I am expecting that beneficiaries of such facilities will use them for their intended purposes, in fact, due diligence exercise should be made to ensure accountability or transparency otherwise failure to do that will render these facilities useless,” said, market analyst, Mr Arthur Harley.
The Bankers Association of Zimbabwe reveals that agriculture and manufacturing dominated sectoral distribution of loans by the financial institutions in the first half of the year.
It also states that loans are being used for importing raw materials, plant equipment and machinery.
