THE African Development Bank (AfDB) has approved a $25 million trade finance facility to CABS, a move meant to support the continental bank’s operations as a provider of trade finance to local firms and small-to-medium size enterprises.
BY BUSINESS REPORTER
The facility was approved by the bank’s board of directors at it’s headquarters in Abidjan, Ivory Coast on Wednesday.
“The resultant credit support will provide for the importation of critical inputs such as agro chemicals, pesticides, farm machinery, spares and equipment, which Zimbabwe urgently needs to revive its agricultural and manufacturing sectors,” AfDB said.
“The credit support will also foster financial sector strengthening and revenue generation. Including roll-overs, it is projected that the facility will finance approximately $150 million of trade over a three and half year period. It is a strategic milestone expected to provide greater comfort to other international lenders to offer additional support.”
The facility was part of the scaling up of AfDB’s interventions in supporting Zimbabwe’s economic turnaround. AfDB was working on a number of initiatives on Zimbabwe, such as helping the country in its re-engagement with the international financial community.
Zimbabwe owes the AfDB $601 million and has promised to clear the debt and arrears to two other preferred creditors, the International Monetary Fund and the World Bank. Zimbabwe owed the three institutions $1,8 billion and has promised to clear the debt by June 30 in the first step towards extinguishing the country’s nearly $10 billion total debt.
AfDB was also assisting Zimbabwe in the provision of basic infrastructure rehabilitation in the water and energy sectors; capacity building and technical assistance for strengthening institutional governance; and supporting the private sector through regional financial institutions that operate and invest in Zimbabwe. In addition, the AfDB manages the Zimbabwe Multi-donor Trust Fund (ZimFund) projects in the energy, and water and sanitation sectors, on behalf of the contributing donors.