CBZ on Diaspora Bond offensive

bring the total Diaspora Bond to US$50 million.
The bank, partnered by the African Export and Import Bank, last year launched the three-year Zimbabwe Economic Recovery Bond, aimed at improving Zimbabwe’s access to liquidity.
In his 2012 National Budget statement, Finance Minister Tendai Biti said negotiations with an identified foreign investor to take up the amount were progressing.

“Modalities are being finalised with an offshore investor to take up the remaining US$7,5 million, to bring the total amount to US$50 million,” Minister Biti said.
The bond, which targeted non-resident Zimbabweans, received a commitment of US$35 million, with locals committing US$15 million.
Ultimately, US$42,5 million was mobilised and has already been disbursed.

Some of the beneficiaries include Zesa, which was allocated US$10 million, and NetOne with US$10,4 million.
Surface Investments received the largest allocation of US$13 million. Other beneficiaries were transport company Haulage Trucks, mining firm Oliken Engineering and Ensign Ginneries.
In June this year, the bond was listed on the Cayman Stock Exchange.

International law firm Hagan Lovells advised Afreximbank that the issuance was a sign that Zimbabwe’s capital markets would begin to open up.
The bond has a four-year tenure and interest would be payable semi-annually. Special features of the bond include prescribed assets, liquid and tax exemption status and a guarantee for capital and interest by Afreximbank.

Zimbabwean companies are grappling with a liquidity crisis as multilateral financial institutions are shunning the country due to its high debt levels.
Government, in conjunction with both local and regional financial houses, has managed to mobilise liquidity through a number of industrial revival facilities.
But disbursements from approved facilities continued to underperform during the year, with the main culprit being bureaucracy by some of the lenders.
Minister Biti said this was exacerbated by other delays related to local banks fulfilling conditions precedent.

During the year, Government and the Afreximbank made available US$70 million under the Zimbabwe Economic Trade Revival Facility and projects worth US$30,2 million have been approved.
In the second half of the year, the Government and Old Mutual Zimbabwe unveiled US$40 million as seed money under the distressed and marginalised areas fund.
In the 2011 Mid-Term Fiscal Policy Review, Government announced a US$15 million small and medium enterprises facility with contributions from CBZ Bank and BADEA, with US$15 million each.