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Business Reporter
THE African Development Bank (AfDB) says it has disbursed about $6 million directly to the private sector in Zimbabwe since the beginning of the year to support the economic revival programme. Following the liberalisation of the economy in February 2009, liquidity has remained one of the challenges scuttling economic revival efforts.
According to an online publication, the bank’s regional director Mr Ebrima Faal said the lines of credit were in addition to those disbursed by institutions such as the African Export-Import Bank and PTA Bank, where AfDB has shareholding.
In 2011, AfDB’s board of directors approved a $8 million loan to finance Lake Harvest Aquaculture project on Lake Kariba, the bank’s first private sector investment in Zimbabwe after many years. The money was disbursed in tranches with a balance of $2 million still to be disbursed.
Mr Faal said the bank “envisages disbursing the balance of the Lake Harvest loan of $2 million by the end of the year”.
“Beyond its direct investment in Lake Harvest, the bank has remained engaged in supporting Zimbabwe’s private sector organisations through its partnership with regional financial institutions that operate and invest in Zimbabwe.
“This indirect exposure is significant and covers all sectors of the economy, including the social, agribusiness, manufacturing and financial sectors,” he said.
“The bank is a shareholder of Afreximbank and PTA Bank, for which Zimbabwe’s country operations amounted to 11 percent and 26 percent of investment operations respectively in 2012.”
Afreximbank recently said it would increase its country support for Zimbabwe by $200 million this year. Mr Faal said AfDB was currently processing lending facilities with both institutions, which would contribute in helping both regional banks continue to support Zimbabwe’s private sector and private investment.
“The bank has also provided a letter of credit to Industrial Development Corporation of South Africa which has on-lend about $30 million to Agribank Zimbabwe.
“The bank is also a limited partner in private equity funds that have already or are currently considering investments in the country,” he said.
Companies in Zimbabwe are in need of lines of credit to replace ageing equipment that are obsolete and inefficient, thereby increasing the cost of production.
Online Reporter