Afrexim Bank to give local industries $100 million


Oliver Kazunga, Senior Business Reporter
THE African Export-Import Bank (Afrexim Bank) will avail about $100 million within the first half of 2016 to help stimulate productivity in local industries.

Afrexim regional manager for Southern Africa Gift Simwaka said yesterday that plans to bail out local industries with working capital were at an advanced stage.

“Plans to release $100 million working capital to local industries are at an advanced stage. But it’ll be useful not to say much at the moment until when we’ve completed the negotiations with the government,” he told Business Chronicle.

“We hope the discussions between Afrexim and the government of Zimbabwe will be concluded soon after which the funding will be availed in the first half.”

It is believed that the envisaged financial bailout by the regional financier will be competitively priced to meet the needs of distressed companies.

Simwaka is on record as saying funding under the $100 million facility would be priced differently according to the tenures that will range between two and three years.

He is also on record as saying Afrexim would make an effort to ensure it avails credible funding according to the needs of respective companies.

Zimbabwe’s manufacturing sector needs over $8 billion working capital to retool and improve productivity, industry experts say.

Since the introduction of a multicurrency system in February 2009, the economy among others has continued to face a tight liquidity situation denting efforts to raise production in the manufacturing sector to competitive levels.

According to a report released by the Confederation of Zimbabwe Industries (CZI) last year, capacity utilisation in the manufacturing sector declined to 34,3 percent from 36,6 percent in 2014.

It is believed that the resources would be availed under the second phase of the Zimbabwe Economic Trade Revival Facility (Zetref) 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 productive sectors of the economy.

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