adminapproved funds – US$922,7 million – were utilised due to stringent conditions that needed to be satisfied before accessing foreign lines of credit.
Out of the US$922,7 million accessed, the largest chunk – US$374,3 million – went to the mining sector. Tourism sectors received the least amount, a paltry US$3,6 million.
Agriculture, financial, manufacturing and telecommunications sectors also benefited from the offshore facilities.
This year alone offshore facilities are anticipated to peak at US$3,5 billion in support of the economic recovery.
Speaking at the Confederation of Zimbabwe Industries economic seminar last week, central bank Governor Dr Gideon Gono, said failure to access foreign lines of credit have affected the liquidity situation of the banking sector and the economy at large.
He said market liquidity had further been constrained by limited activity on the inter-bank market due to lack of acceptable money market instruments.
“The banking sector has largely mobilised short-term deposits, which are transitory and volatile in nature, mainly driven by salary payments.
“The short-term nature of deposits has hindered effective financial intermediation to the productive sectors as lending is restricted to short-term periods,” said Dr Gono.
He added that persistent bank-level liquidity challenges might result in some banks failing to honour their obligations, leading to heightened systematic risk.
“Short-term lending has potential to create asset quality vulnerabilities due to mismatches between short-term funding and credit requirements of medium to long-term projects,” he said.
“An illiquid market also increases the cost of credit and heightens default probabilities among borrowers.”
Last year Government and the Africa Export and Import Bank signed the US$70 million Zimbabwe Economic Trade Revival Facility and US$30,2 million was approved for disbursement.
This year, it is anticipated that the full amount will be disbursed. Another facility, the Distressed and Marginalised Areas Fund, a five-year collaborative facility, was launched with a seed capital of US$40 million provided by Government and Old Mutual Zimbabwe.
Following the launch of the facilities in October last year, disbursements are yet to be made due to differences on the selection of the intended beneficiaries.
CBZ Bank in collaboration with Afreximbank also floated a three-year Zimbabwe Economic Revival Bond, with resources amounting to US$42,5 million being mobilised and disbursed.
Online Reporter