Afreximbank expansion benefits Southern Africa
By Southern Times Writer
Harare – Southern Africa is set to become the first region on the continent to benefit from Afreximbank’s expansion drive as the pan-African financial institution undertakes to construct permanent regional offices in Zimbabwe.
Dubbed “Afreximbank – Africa Trade Centres”, the offices will operate as mini business parks with integrated one-stop trade services shops to boost trade.
Afreximbank is regarded as the leading pan-African multilateral financing institution and last year, it doled out $10,3 billion in credit facilities on the continent.
As part of its expansion programme, the bank has developed a concept to transform its business into one-trade service shops that will be set up in all five regions on the continent.
Speaking at a the handover ceremony by the Zimbabwe government of the land-title for construction of the centre in Harare at the weekend, Afreximbank President Dr Benedict Oramah said Zimbabwe had become the first on the continent to benefit from envisaged business parks.
“I am pleased to note that Zimbabwe will be the first beneficiary of this concept. The project, when completed, will transform Zimbabwe into an intra-African trade hub; a centre of knowledge and information markets; as well as a centre where major deals can be struck.”
The Afreximbank President said the complexes would enhance the institution’s activities in Southern Africa.
“The project will also accelerate the transformation of the area into a business district and will enable Afreximbank to expand its operations in Southern Africa in size, scope and complexity.”
He said that Afreximbank’s interventions in Zimbabwe had been “deep and far-reaching, with cumulative disbursements during the last decade topping $3 billion”.
Dr Oramah also revealed that the pan-African bank was facilitating deals valued at about $1 billion for public and private sector entities in Zimbabwe.
The Afreximbank President said the offices would offer such facilities such as a large conference centre; a trade information centre; corporate rental office space for trade promoting bodies, export credit agencies, commercial banks, a small business innovation and incubation hub; upmarket furnished offices; high end shops and restaurants.
Speaking at the same occasion, Zimbabwe’s Finance Minister Patrick Chinamasa lauded Afreximbank for bailing out his country.
He said in particular, the latest $600 million facility that had been provided by the pan-African bank would ease the country’s current foreign currency shortages.
“As you may be aware, the Reserve Bank of Zimbabwe is currently working on the following new facilities with Afreximbank, $600 million Nostro Stabilisation Facility to meet the forex requirements for productive foreign payments; and $150 million letters of credit facility to support the importation of fuel, fertilisers and feedstock for the manufacture of cooking oil.”
Minister Chinamasa said Zimbabwe is anticipating to draw on the $600 million fund immediately as the country usually experiences foreign currency shortages from October to March.
“We run the risk of retarding the economic growth if the country fails to secure foreign exchange for the feedstock into the economy.
“It is against this background, that I am appealing to the Board and management of Afreximbank to provide the much needed assistance especially during this foreign exchange dry period – October to February.”
He added that other facilities provided by Aferximbank had abeen “indispensable to the country’s economy.”
“The Government of Zimbabwe recognizes the indispensable role provided by Afreximbank as it has extended numerous credit facilities to this economy over the past two decades and continues to do so. Afreximbank has a number of facilities in an amount of around just under $1 billion to support economic activities in Zimbabwe. Some of the running facilities include: $200 million Aftrades facility to support banking sector stability; $200 million future flows export facility; $150 million gold backed facility; $150 million ZESA facility; $70 million grain import facility; and over $150 million worth of facilities having been extended to various sectors of the economy – chief among them, being tobacco and tourism sectors.”
Minister Chinamasa said Zimbabwe remains “greatly indebted to Afreximbank for the critical lifeline support that is geared at rejuvenating economic activity which is an essential ingredient to current efforts.”
Since its establishment in October 1993 Afreximbank has availed more than $51 billion in credit facilities for African businesses.
The Bank was established by African governments, African private and institutional investors, and non-African investors.