adminOliver Kazunga Senior Business Reporter
THE African Export-Import Bank (Afrexim Bank) says it will avail about $100 million working capital to local companies within the first quarter of next year.
The country has since February 2009 been facing tight liquidity which has adversely affected production.
Afrexim Bank regional manager for Southern Africa, Gift Simwaka yesterday said the bank was in the process of carrying out an industrial needs assessment.
“Our negotiations with the government to see how best we can assist the local industry with a loan facility are progressing well. We’re expecting to avail the funding within the first quarter of next year,” he said.
Simwaka told The Chronicle early this month during a tour of companies organised by the Office of the President and Cabinet’s public affairs and knowledge management directorate, that Afrexim Bank was set to avail between $50 million and $100 million to the productive sector.
The loan facility will be availed under the second phase of the Zimbabwe Economic Trade Revival Facility (Zetref) which is meant to provide cheap financing to industries and help drive capacity utilisation.
Zetref II will be a successor to the $70 million released by Afrexim Bank in 2011 to help revive the economy’s productive sectors.
“We’re doing needs assessment for industry with the idea to structure the facility based on companies’ funding requirements.”
‘We’ve noted that funding is a critical requirement for local companies that at the moment are hamstrung by the tight liquidity situation,” he said.
According to the Confederation of Zimbabwe Industries, capacity utilisation in the manufacturing sector last year stood at 36,3 percent due to liquidity crisis, and intermittent power supplies.
Financial institutions such as the International Monetary Fund (IMF) and the World Bank are yet to open lines of credit but government has since engaged the institutions with a view to finding how best to clear its external debt which has seen the country being perceived as high risk country.
The country’s total external debt stands at $10.8 billion, with $6.8 billion of that being public debt and remainder being private sector loans.
The government has come up with a debt clearance strategy to settle a combined $1,8 billion owed to the IMF, World Bank, and the African Development Bank by end of April 2016.
The move has been hailed by the business community as it would unlock opportunities for fresh credit lines that are needed to resuscitate the ailing industries.
Online Reporter