UNCERTAINTIES being exerted on the global economy by the COVID–19 pandemic have become unbearable and nobody knows for certain how long the pandemic will be with us .
The explosion of a new variant, which was detected in southern African last week, demonstrates just how the future looks gloomy.
The threats of a fresh round of hard lockdowns are lingering on, and with it, the potential for global lenders to hold back on giving loans to companies and governments.
Experiences of the past year should have taught companies what happens when they are forced to operate in an environment starved of funding.
Everything grinds to a standstill, companies fold and workers lose jobs.
Pushed to the corner, investors pull out and move to safer destinations.
Surely, this would not be a good situation for growing economies like Zimbabwe.
But for domestic firms that have been receiving loans from the regional lender, Africa Export Import Bank (Afreximbank), this is an opportunity to weather the COVID-19 storm and shine.
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It is one of only a few institutions that have been extending loans to Zimbabwe during a period of painful isolation, and these loans may not be cheap, hence the need to put them to full use.
Afreximbank recently signed financing agreements with four Zimbabwean entities worth US$188,6 million at conclusion of the recently concluded second Intra-African Trade Fair (IATF) that took place in Durban, South Africa.
This is in addition to many other facilities provided to domestic firms, and the government during the past 25 years.
The bank estimates the interventions to be worth about US$13 billion.
Its recent interventions have been strategic, targeted at institutions that drive Zimbabwe’s economy, and it important for these firms to deploy the resource strategically.
It extended US$110,4 million facility to Zimbabwe Electricity Transmission and Distribution Company (ZETDC) to help the parastatal improve power generating capacity.
Funding from the loan facility has been earmarked to help ZETDC improve revenue collection through the rollout of more smart and prepaid meters.
Many other companies have also benefitted.
In this climate, accessing loans is no easy thing.
Companies must remember that once they get the loans, the next step is to make sure that businesses are galvanised against any eventualities that may come from the pandemic.
They must invest for the future, stocking up raw material and paying expenses in advance where possible, just to makes sure that should the situation blows out of proportion, production wont be affected.
By so doing, the guarantee their shareholder protection of their investments, and the country a continued service.
