US$135 million for local private sector players

Business Reporter

ZIMBABWE’S private sector is set to benefit from lines of credit to the tune of US$135 million from the African Development Bank (AfDB).

The multilateral development bank has been at the forefront of providing funding to the country’s private sector players. It has also funded various key public projects.

AfDB Zimbabwe country manager Ms Moono Mupotola said the institution will increase its financing to the private sector.

“The bank has also supported the private sector by offering lines of credit and transactional guarantee facilities to local commercial banks to lend to the productive sectors. In 2023, the bank approved US$25 million to CABS and US$15 million to NMB and the first quarter of 2024, another transaction guarantee of US$15 million for First Capital Bank,” revealed Ms Mupotola.

“Our private sector 2025 pipeline stands at US$135 million, which includes a US$50 million agency line and a possible US$60 million corporate loan.”

She was speaking during the AfDB’s 60th anniversary celebrations in Harare last week.

The AfDB is also supporting the clearance of Zimbabwe’s long-outstanding debt.

Said Ms Mupotola: “We believe that the substantial public debt remains a significant obstacle to attaining Zimbabwe’s development aspirations.

“The Government has established a structured platform to facilitate high-level dialogue with its creditors.

“It has also established sector working groups providing technical discussions; the three pillars underlining the Central Pin Strategy have progressed.”

Pillar one entails the transfer of the country’s liabilities from the Reserve Bank of Zimbabwe to Treasury and continuing technical discussions between the Government and the International Monetary Fund, which will inform a Staff-Monitored Programme.

Under pillar two, the Government and creditors have agreed to 16 indicators that will measure the performance of governance reforms.

The AfDB country manager said three out of five technical committees have met, adding that  “some of the concerns by civil society organisations regarding the Private Voluntary Organisations (PVO) Bill were accommodated”.

She also said, under pillar three, the compensation committee has cleared 600 former farm owners and 100 bilateral investment protection and promotion agreements for payment under the 2024 Budget.

“The 99-year lease has been redrafted. The Government will host a high-level dialogue before the end of the year to assess progress made under this programme,” added Ms Mupotola.

Finance, Economic Development and Investment Promotion Minister Professor Mthuli Ncube, who is also the current governor of the AfDB, commended the financier’s support on the arrears clearance and debt resolution front.

“The support under the arrears and debt clearance process is crucial in capacitating the Government and the country to resolve the long-standing challenge, which has hamstrung our development efforts,” said Prof Ncube.

The AfDB has invested over US$1 billion in the country over the years, covering various sectors, including transport, energy, agriculture, water and sanitation, health, education and governance.

Ms Mupotola revealed that the Zambezi River Authority (ZRA) had requested that the AfDB be the lead arranger for the 2 500 megawatt (MW) Batoka hydroelectric project.

The US$4,5 billion project, to be implemented by ZRA, is expected to significantly improve power supply in Zimbabwe and Zambia.

She also said engagements with the National Railways of Zimbabwe were underway.

“This week (last week), a high-level team from headquarters and our regional office is exploring collaboration with the National Railways of Zimbabwe and the private sector,” said the AfDB country manager.