NDAMU SANDU IN MOSCOW, RUSSIA
Zimbabwean bankers are leaving nothing to chance with nearly half a dozen executives at the Afreximbank annual general meetings as they move to lure lines of credit to oil the economy.
The annual meetings run from June 20 to 22. The Moscow ‘invasion’ by the bankers comes at a time when the economy has been beset by foreign currency shortages which have seen the parallel marketing booming on the back of a mismatch between demand and supply.
Bankers who spoke to Business Times said they are in the hunt for lines of credit and correspondent banking relationships.
“We are looking for money,” said Francis Dzanya, a partner at DBF Capital, a Mauritius-based investment holding company focusing on private equity, investment banking, financial advisory services and real estate. It was founded in 2015 by ex-BancABC executives—Dzanya, Douglas Munatsi and Bekithemba Moyo.
DBF are shareholders in Xtenda, a micro financier with operations in Tanzania, Mozambique, Zambia and Zimbabwe.
POSB chief executive officer Admore Kandlela said he was in the hunt for lines of credit and correspondent banking relationships.
“We have picked there are some banks who have potential for partnership over and above our own African banks,” he said.
“One says it wants correspondent relationship and also to extend lines of credit.”
Zimbabwe lost over 50 correspondent banking relationships since 2008 due to compliance issues and sanctions posing a risk to local banks’ efforts to attract lines of credit required to reboot the economy.
CBZ Holdings CEO Blessing Mudavanhu said his team was in Moscow by virtue of the banking group being a shareholder in Afreximbank and was looking forward to get more support from the Cairo-headquartered bank.
“We are a shareholder of Afreximbank so we attend the annual general meetings. We also participate to attend to business strategies as they are our funding partner in Zimbabwe. They are always very supportive and we look for as much as we can get,” he said.
Zimbabwe requires foreign currency to import raw materials and pay for services rendered by foreign companies. However, one of the top foreign currency earners, gold, has underperformed in the first four months of the year with export receipts down 9 percent to US$383,9m from US$425m in the comparable period last year attributed to a revision in the forex retention threshold to 55 percent from 70 percent.
Zimbabwe cannot borrow from international financial institutions as it is in debt distress with external arrears of US$5,7m at end of 2017, which prevented new financing from the international financial institutions and limited access to external financing to non-traditional official and commercial creditors, according to a latest report by the International Monetary Fund (IMF).
IMF said Zimbabwe has expressed a renewed commitment to reengage with the international community, beginning by clearing multilateral arrears with the IFIs, and they have recently made token payments to the international financial institutions.
It said Zimbabwe has also contracted a new commercial debt from an established
external creditor that has been collateralised with future mineral exports.
“While the loan is necessary to assist in the authorities’ response to the economic and humanitarian crisis, it has the potential to further complicate negotiations with external creditors to restore debt sustainability,” IMF said.