The African Export-Import Bank (Afreximbank) has pledged to support the government to avert hunger as it will not fold its hands while Zimbabweans starve.
BY NDAMU SANDU
Afreximbank president Benedict Oramah told NewsDay on the sidelines of a business conference in Egypt on Sunday that the Cairo-headquartered bank would contribute to the fund meant to import food.
“We cannot fold our hands and let the people starve because of nature. We are in discussions with the government of Zimbabwe and the Reserve Bank to see how we can give support,” he said. African Export-Import Bank
“Hopefully we will be able to finalise. We will look at other ways of supporting Zimbabwe and we will contribute to the $1,5 billion required to meet the needs created by El Nino.”
Early this month, government declared the 2015/2016 drought a state of emergency and launched a $1,5 billion appeal to donors to mitigate the situation in response to the El Niño-stimulated dry spells which have left people and livestock in dire straits.
The pledge by Afreximbank comes, as the Famine Early Warning Systems Network (Fewsnet) warned early this month that the severe drought in Southern Africa would drive food assistance needs in 2016 and 2017.
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Oramah also told NewsDay that the bank would assist Zimbabwe to ramp up gold output by providing funding to artisanal miners.
“We are in discussions to see how we can support the gold sector through the Reserve Bank. We are having discussions where we will provide funding to RBZ to make it available to artisanal miners,” he said.
Afreximbank is providing advisory services and other forms of support to facilitate Zimbabwe’s clearance of its arrears to creditors and unlock fresh lines of credit.
The debt clearance plan begins with the clearance of the $1,8 billion arrears by June to the three preferred creditors — the International Monetary Fund (IMF) and World Bank.
Zimbabwe will use the bridge loan facility arranged by its debt advisors, Afreximbank, to clear its outstanding arrears to AfDB ($585 million) and African Development Fund ($16 million). The bridge loan would be repaid using inflows from the Fragile State Facility of AfDB.
Zimbabwe will use Special Drawing Rights holdings to clear the $110 million owed to IMF.
Government will secure a medium to long-term loan to clear its $1,1 billion arrears to the World Bank Group.
Oramah said the clearing of the arrears would unlock fresh capital to reboot the economy.
“It paves way for Zimbabwe to access multilateral funds, which we believe will give a huge boost to the economy. It will expand sources of funding. Commercial banks have been hesitating and that will change the picture,” he said.
“The level of support that we are seeing from these creditors is something to be proud of considering the difficulties of negotiating this landmark deal.”
Afreximbank has been supporting Zimbabwe and is guaranteeing the $200 million interbank facility. Oramah added the bank was “doing its mandate as it was created to deal with market failure”.
