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THE African Export-Import Bank (Afreximbank) has teamed up with a pan-African housing finance company to provide funding for the country’s tourism industry.
Gift Simwaka, Afreximbank’s regional manager for Southern Africa told Standardbusiness that Shelter Afrique is willing to finance tourism projects in Zimbabwe.
“Our partnership leverages Shelter Afrique’s long experience in construction finance and ours in structured financial future flow pre-financing in support of the tourism industry,” he said.
“We refinance projects originally funded by Shelter Afrique, up to a maximum tenure of seven years.”
The move is set to renew the tourism which has suffered years of neglect during the economic crisis of the past decade.
Players have been crying for capital injection to revive the industry.
With local banks offering short term credits it means that there is no money for long term projects such as the building of new hotels.
Simwaka said the bank had set a specific amount but the cap on such facilities would be determined by the country limit for Zimbabwe.
It is hoped that Afreximbank can support a wide spread of financing requests based on their merits.
“We can also confirm that this is in line with our strategy wherein we seek to expand our support to service export generative industries, an area which has traditionally not received the attention it deserves as most trade finance institutions have concentrated on supporting commodity exports,” Simwaka said.
The growth of the industry is largely dependent on the support it receives from enabling sectors as echoed by speakers at tourism summit last week.
The Pan African Tourism Investment Summit drew over 300 investors and was held by the ministry of Tourism and Hospitality Industry in conjunction with Africa Investor.
Funders told stakeholders that they were awash with cash but wanted to see bankable projects.
Africa Finance Corporation (AFC) deputy chief executive officer, Solomon Asamoah, told stakeholders “there is no shortage of cash for good projects in Africa”.
“Infrastructure is relatively well known but a difficult sector because it is long term so you need long term money,” he said.
AFC’s main thrust is in power, transport and infrastructure, telecommunications and heavy industries.
All of AFC’s main thrusts save for heavy industries are vital for the growth of the tourism industry.
AFC will have a bilateral meeting with the ministry of Energy and Power Development on how it can finance power generation, Deputy Prime Minister Arthur Mutambara said.
Kevin Teeroovengadum, a director with private equity firm, Actis, told stakeholders the firm is looking at financing projects in the range of US$20 million to US$40 million.
He said the private equity firm can assist in adding on boards of hospitality groups.
Actis can also help management to raise debt as it has partnerships with developmental financial institutions.
He said the firm’s experience in the hospitality sector was gained after investing in Protea Hotels which allowed “us to understand how hospitality works”.
Actis has interests in emerging markets.
Mbuyazwe Magagula who is in the Tourism Business Unit of South Africa’s Industrial Development Corporation (IDC) said the South African firm is in talks with a Zimbabwean operator.
Magagula says IDC sees opportunity in refurbishment, not on creating capacity.
But what do investors want to see in an environment before committing their funds?
Asamoah says a stable political and economic environment sways investors into a destination.
He says there is need for full partnership between government and private sector and the partnership should be in action not words.
Catherine Namugala, Zambian Tourism, Environment and Natural Resources Minister said ministries in charge of tourism should influence legislations “so that by the end of the day we become facilitators of investments”.
She said Zambia had reduced the number of licences that investors can get to work in any sector.
“In some cases you have a hundred licences and this is a hassle for business.
“The core of business is to create wealth. When you do an audit you see that many of them (licences) are unnecessary,” she said.
The time it takes to invest in a destination is cited as a plus or hindrance for investments.
Zimbabwe is simplifying the procedure and says it will create a one-stop shop by June.
As Zimbabwe searches for investors, the gazetting of the Indigenisation regulations has unnerved a number of interested parties.
But Tourism and Hospitality Industry Minister Walter Mzembi, said the tourism industry is compliant with the Act and is looking for foreign partners.
“. . .80% of the tourism sector is already in indigenous hands and therefore it has scope for greater external shareholding, as well as for other innovative models that can give comfort to the external investor, than might be the case in our other sectors,” he said.
BY NDAMU SANDU
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