THE African Export Import Bank (Afreximbank) has pledged to give Zimbabwe nearly $800 million in lines of credit in the coming year, a development that could ease the country’s liquidity constraints, the bank’s official has said.
Report by Victoria Mtomba
Addressing the bank’s extraordinary general meeting at the weekend, visiting Afreximbank president Jean Louis Akra said the regional bank is considering increasing loans advanced to the country in 2013. Akra said the interest rates would be between 6%-8% although that depends on the duration of the tenure.
“With the development of the Zimbabwe economy, the amount can be between $700 million to $800 million. The interest rates will depend on the projects, the tenure of the projects and the international market,” he said.
He said the bank’s shareholders evaluated ways in which the bank could increase capital for the regional bank.
“I am pleased to inform you that unanimously, shareholders agreed, given the current situation of most African countries. It will be opportune to invite more private players to come and participate in the shareholding of Afreximbank.
“Shareholders have approved the creation of a new class of shareholders, the sale of 500 million shares have been offered to that new category of shareholders,” he said.
Akra said when the bank was started, it had three classes of shareholders: A for governors, B African private sector and C non-African private sector. But under the new shareholding structure, a new class will be introduced.
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“We have started contacting potential investors through the four financial advisers that we have appointed. Immediately, when we return to Cairo, we will begin. Given the appetite of the market right now, we believe by mid next year 500 million shares would have been subscribed,” he said.
Akra said the bank passed the $1 trillion trade mark in 2011. Addressing journalists after the meeting, Reserve Bank of Zimbabwe governor, Gideon Gono, said the country has received $3 billion in the last 15-20 years from the Afreximbank compared to $2,5 billion from the International Monetary Fund, the World Bank and the African Development Bank.
Gono added that Afreximbank had extended $600 million in loans to government and the private sector this year.
“We have benefited to the tune of $3 billion that is revolving that we have received from Afreximbank between 1997 and 2012. You may want to compare this amount with $2,5 billion we have received from three multilateral financial institutions, that is the International Monetary Fund, the World Bank and the African Development Bank,” he said.
Meanwhile, Treasury estimates that the country requires a $4 billion stimulus package next year to quicken economic growth.
