Ecobank guarantees funds remittance

June 24, 2021

Financial services provider, Ecobank Zimbabwe Limited, is working with the government to guarantee investors’ rights to remit funds including profits, dividends and proceeds of share transfers out of Zimbabwe, Business Times can report.

The latest development comes at a time when preconditions for the repatriation of foreign currency have been a major headache for offshore investors with critics saying Zimbabwe’s investment policy was unfavourable.

“We are working with the Reserve Bank of Zimbabwe (RBZ) and the Ministry of Finance  and Economic Development to avail guarantees on investors that are bringing money here (in Zimbabwe),” Ecobank Zimbabwe MD Moses Kurenjekwa told Business Times.

He added: “(Investors’) remittance of earnings and dividends can be guaranteed by our bank because we are the biggest underwriter of government risk and we are a bank.”

From June to May, the foreign currency auction allotted US$105,994,414 for loan repayments, dividends, education and portfolio investments.

The guarantee by Ecobank comes on the back of an Afreximbank facility signed in 2018 to assure investors of their investments in Zimbabwe. Afreximbank’s guarantee comes under the ZimOpen initiative intended to “de-risk investments” that come into Zimbabwe, that is, foreign direct investments and those who choose to deposit funds in Zimbabwe.

This is not the first time that Ecobank Zimbabwe has provided guarantees. The bank, a unit of Togo-headquartered Ecobank Transnational Incorporated (ETI) — recently provided guarantees for the country’s power utility ZESA electricity imports from regional suppliers and for local cooking oil companies. The lender is also working on providing funding for local miners’ green and brown projects.

The lender, Kurenjekwa said  was also front runners in terms of facilitating trade finance facilities for import and export businesses in the African continent.

“In terms of regional play we are also facilitating (trade finance facilities for those that would participate in the African Free Continental Trade Area meaning they can import and export without been asked to pay money first),” Kurenjekwa said.

The bank has also been providing credit lines for the importation of critical consumables for local manufacturing industry. 

It has also been extending funding to local miners.

Ecobank Zimbabwe currently boasts of 12 branches across Zimbabwe and is still looking at opportunities to expand while following its value chain strategy on expansion.The bank has also since advanced its digitalization strategy through introduction of a mobile phone application called QR which is set to make transacting more convenient.

The QR code is a type of matrix first designed in 1994 for the automotive industry in Japan.  

A barcode is a machine-readable optical label that contains information about the item to which it is attached.

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