HARARE – The African Export and Import Bank (Afreximbank) says it will increase its lending capacity to Zimbabwe to $800 million as part of efforts to enhance economic growth of the southern African country.
Jean-Louis Ekra, Afreximbank president, last week said the continental bank will continue with its mandate of supporting African economies.
“We have assisted Zimbabwe in the past and we will continue with our support,” said Ekra at the end of the institution’s third extra ordinary meeting (EGM) in Harare.
“This year alone the bank advanced nearly $600 million to Zimbabwe either directly or through financial institutions and in the coming year the figure can easily increase to around $700 or $800 million,” he said.
The trade finance bank, which recently more than doubled Zimbabwe’s borrowing capacity to $600 million from $200 million, has remained committed in giving financial support to the country at a time when most international lenders have stopped advancing loans as a result of its failure to repay.
According to Finance minister Tendai Biti, Zimbabwe’s external debt is now estimated at more than $10 billion and for more than a decade, the country has been in default, with arrears now estimated at $6,1 billion.
Ekra said since inception in 1993, Afreximbank has approved $3,2 billion cumulative loans for Zimbabwe and to date has disbursed more than $2,6 billion.
In 2010, the bank provided $50 million to the Zimbabwe Trade Revival Facility, meant to provide cheap finance to companies for retooling purposes.
Government chipped in with $20 million to bring the total purse to $70 million.
The EGM was attended by bankers from across the continent.
It aimed at finding ways to recapitalise the bank so that it can effectively carry out its duties of promoting trade in Africa.
“Shareholders unanimously agreed the allotment of shares of the new class D for up to a nominal amount of $500 million.
“What this means is that we are creating another class for private investors to come in and help us recapitalise,” Ekra said.
Afreximbank was established in Abuja, Nigeria in 1993 by African governments, African private and institutional investors, as well as non-African financial institutions and private investors for the purpose of financing, promoting and expanding intra-African and extra-African trade. – Business Writer