THE Africa Import-Export Bank (Afreximbank) sees signs of recovery in the Zimbabwean economy and would continue providing support to revive industries, a top official has said.
Report by Ndamu Sandu
Jean-Louis Ekra, Afreximbank’s chairman and president, told Standardbusiness on the sidelines of a trade meeting in Ethiopia last week, that the bank was created to provide “support, not to shy away when people need you”.
“We look at Zimbabwe as a country which needs foreign assistance, but they are not getting it from other international banks. It is our role to be there because we were created for that,” Ekra said.
“I see signs of good recovery in the economy and as the economy will continue to recover, we will continue to increase our support.”
This comes after the trade finance bank more than doubled the country’s borrowing capacity to US$600 million from US$200 million.
The bank provided US$50 million to the Zimbabwe Trade Revival Facility (Zetref), meant to provide cheap financing to companies for retooling purposes.
The government chipped in with US$20 million to bring the total purse to US$70 million, meant for the revival of industries.
Ekra told Standardbusiness there were possibilities of having another facility for industries if the current one was fully utilised.
“You need to revitalise all the small and medium enterprises, which have brought Zimbabwe to where it is today. all those companies in the Bulawayo area which were manufacturing not only for the local market, but the sub-regional market, you need to put them back to where they were. That will help Zimbabwe,” Ekra said.
The Cairo-headquartered bank is also working on a financial instrument to be used as collateral in interbank placements by banks.
The instrument would play a part in the distribution of liquidity from those that have excess funds to players facing some shortages.
Currently, there are no financial instruments on the market which can be used to distribute liquidity.
The Finance minister Tendai Biti recently said he would introduce short-term instruments — Treasury Bills — before the end of the year.
Ekra said discussions were currently underway, involving the three parties; government, the central bank and banks, on how the financial instrument would be structured.
Ekra was in the country early this year and made presentations to the banking stakeholders on how the financial instrument would be implemented.
The proposal has not been implemented amid indications some local banks were not interested in the plan, which has the blessings from the country’s big banks.
The Afreximbank boss was hopeful the instrument would be introduced, adding stakeholders were looking at technical issues.
Some of the technical issues include how the financial instrument would be introduced and whether Afreximbank would play a role like the central bank, which he said was not possible.
Early this year, Ekra visited the country, where he made presentations on how the interbank facility would be introduced.
Afreximbank‘s US$9m locked in Interfin
The trade finance bank has over US$9 million locked in Interfin, currently under recuperative curatorship.
The money is the balance unpaid from US$15 million extended for on-lending to clients under a facility separate from Zetref.