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Michael Tome
Business Reporter
POSB, a Mutapa Investment Fund (MIF) subsidiary, intends to raise an additional US$10 million line of credit to support critical sectors of Zimbabwe’s economy.
The bank recently secured a US$10 million facility from the African Export-Import Bank (Afreximbank), under the African Trade Facilitation Programme.
The funds are meant to provide support for Zimbabwe’s key productive sectors to position the domestic economy for a more competitive and resilient future.
Targeted key sectors include mining, agriculture, manufacturing and services.
Zimbabwe’s economic growth is expected to be anchored in high foreign currency inflows, mainly from the targeted sectors.
The Ministry of Finance, Economic Development and Investment Promotion’s 2025 Budget Strategy Paper has projected the mining and quarrying sector to contribute 5,2 percent to the country’s Gross Domestic Product this year and 5,4 percent in 2025.
From a forecast dip of 21,2 percent in 2024, the agriculture, hunting and fishing and forestry sector is projected to grow by 23,6 percent and 7 percent in 2025 and 2026, respectively.
The projected growth can only be attained if the requisite support is given to the sectors.
POSB will also extend funding towards capacitating small and medium enterprises to contribute to economic transformation and community development.
POSB chief executive officer Mr Garainashe Changunda said the funding was required to support productive sectors when importing essential inputs required to produce for export markets.
“We have already secured a US$10 million line of credit, but we are aiming to secure another US$10 million before year-end. We are looking at importers; if you want to import raw materials or equipment so that you produce for the export market.
“The bank will also target projects that will improve sustainability, in line with its ESG (environmental, social and governance) thrust.
“This year, we are targeting a total of US$20 million in lines of credit but it depends on the appetite of our
clients for credit facilities and the availability of lines of credit,” said Mr Changunda.
This comes as POSB has revived the partial privatisation plans put on hold in August 2023, as the Government remains committed to ensuring maximum returns on investment from State-owned enterprises.
Early last year, POSB said it had presented the final partial privatisation strategy document to the Minister of Finance, Economic Development and Investment Promotion, Professor Mthuli Ncube, but the process was later halted.
The partial privatisation agenda presents an avenue for the recapitalisation of the bank to boost capacity to finance essential sectors of the economy.
Analysts consider partial privatisation as a tool for improved efficiency as private investors typically bring in resources, expertise and market-driven practices that help enhance the bank’s operations. They say selling a portion of the bank to private investors would enable POSB to raise additional capital, which can also be used for business expansion, technology upgrades and improvement of its financial position.
The Government has 100 percent shareholding in POSB, which has over 800 000 account holders, and sees privatisation as a viable alternative to drive the bank’s growth.
It has an infrastructure and distribution network unmatched by any other bank in Zimbabwe.
The partial privatisation drive would enable POSB to reboot its capital base to underwrite more business.
During the year under review, the Government transferred 100 percent of its stake in POSB to MIF, an investment vehicle established under the Sovereign Wealth Fund of Zimbabwe Act Chapter 22:20.
All the shares were transferred to the new shareholder during the last quarter of 2023.
POSB remains well-capitalised. It has a capital adequacy ratio of 57 percent and 61 percent as at December 31, 2023 and June 30, 2024, respectively.
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