THE African Export Import Bank (Afreximbank) has revealed that it had released a US$200 million facility to finance imports and an export incentive programme put in place by the Reserve Bank of Zimbabwe (RBZ) to improve foreign currency inflows.
The disclosure was made on Friday by Afreximbank’s regional manager for southern Africa, Gift Simwaka, at a glittering awards ceremony for the Financial Gazette’s Top Companies Survey sponsored by diversified financial services giant, Old Mutual Zimbabwe.
Afreximbank, which vowed to continue supporting Zimbabwe “during these challenging times”, said exporters would access funding when their nostro accounts run dry.
Stocks of United States dollars have been depleting, creating a liquidity crunch that has ruined economic recovery which started with dollarisation of the country’s economy in 2009.
Zimbabwe ditched its domestic currency after it experienced a hyperinflationary crisis that led to an unprecedented erosion of the unit and triggered widespread commodity shortages.
Simwaka told business executives gathered for the awards ceremony that Afreximbank had extended a US$200 million facility to finance imports given that the challenging global environment in which export earnings for most African countries have significantly weakened.
“The facility will also ensure the availability of internationally transferable funds to settle for import transactions by exporters who will benefit from some of the incentive measures being put in place by authorities,” Simwaka said, indicating that drawdown would be triggered by the central bank “as and when they are short on nostro balances”.
The RBZ has unveiled export incentives it said are backed by a US$200 million facility from Afreximbank.
The RBZ announced in May that it had established a US$200 million foreign exchange and export incentive facility which it said was supported by Afreximbank to provide cushion on the high demand for foreign exchange and to provide an incentive facility of up to five percent on all foreign exchange receipts, including tobacco and gold sale proceeds.
The incentives, which will be paid it the form of soon-to-be-introduced bond notes, was largely seen as an attempt to bring back the Zimbabwe through the back door, an allegation denied by the RBZ governor, John Mangudya.
In fact, it has been suggested by critics that the US$200 million facility was non-existent, and that the RBZ and government was trying to cheat Zimbabweans of their hard-earned greenbacks through the incentives facility.
The silence by Afreximbank on the issue had reinforced conspiracy theories.
Mangudya indicated that the RBZ would pay the incentives in bond notes to avoid externalisation of the US dollar.
“In order to mitigate against possible abuses of this facility through capital flight, this facility shall be granted to qualifying foreign exchange earners in bond coins and notes which shall continue to operate alongside the currencies within the multi-currency system and at par with the US dollar. Financial Gazette