NDAMU SANDU
He came. He saw and he is now a convert. A senior executive of the African Development Bank (AfDB), who recently visited Zimbabwe, says the bank is serious about working with the private sector, infrastructure and renewable energy sectors in the country.
“I am a convert now – I see the cup as half full versus half empty,” said Solomon Quaynor, AfDB’s vice president Private Sector, Infrastructure and Industrialisation.
Quaynor visited Zimbabwe alongside Kevin Kariuki, the bank’s vice president for Power, Energy, Climate and Green Growth to scout for investment opportunities.
The AfDB team met ministers of finance, agriculture, energy and that of industry, central bank officials and executives from the private sector.
Quaynor said opportunities exist with export-oriented companies and also systemic important domestic companies who diversify with exports in the SADC sub region.
“We will also work with select key banks, as they know their market well, and how to manage evolving dynamic issues,” he wrote on business and employment-oriented online service, LinkedIn.
Quaynor said Zimbabwe is also key to the north south and west east economic corridors, especially the Maputo and Beira corridors, and the north south corridor to Durban and “we have to think regional integration when we think of the logistics chain and we need to address the transit and origination through Zimbabwe for the sake of the region”.
He said agribusiness or fast moving consumer goods and mineral beneficiation present particular opportunities. Private Equity could create turn around opportunities and seed the future African champions from Zimbabwe, but this is tricky for investors but “we need to take some calculated portfolio risk”, Quaynor said.
He said regional power opportunities like the 2,400MW Batoka Gorge hydroelectric project have commitment at the highest levels in Zimbabwe and Zambia.
“We should capitalise and make it happen, as this is a SAPP [Southern African Power Pool] bankable renewable project. Smaller scale 70MW solar park projects like Harava Solar Park are being implemented in phases – we should support the renewable drive,” the executive said.
However, not all is rosy. The elephant in the room is exchange rate controls and access for USD investors, Quaynor said.
“Key private sector leaders are managing the exchange rate complications and access reasonably well. The Reserve Bank is also taking positive actions within its own constraints. Not all perfect, but AfDB is ready to engage with both private sector and government for financing and advice, respectively,” he said.
The AfDB team met private sector players including CABS, Old Mutual, Ecobank, Takura Capital, Steel Makers, Harava Solar Park, Econet Wireless, Masawara, CBZ and Mangwana Capital, among others.
CABS managing director Mehluli Mpofu said the bank’s engagement with the AfDB team centred on how it can access offshore lines of credit for its customers.
In 2018, CABS got a US$25m facility from AfDB which was paid off last year.
“We see an opportunity to re-engage, to redraw on that particular facility because in line with the thrust to grow our US$ business, we still see a significant opportunity to access offshore lines of credit and deploy them in that particular manner,” Mpofu said this week.
The talks came four months after AfDB approved a US$7.5m trade guarantee facility for CABS which cushions international banks against the non-payment risk arising from the confirmation of letters of credit and similar trade finance instruments originated by the mortgage lender on behalf of its clients.
Mpofu said the facility allows CABS to issue letters of credit to its customers. He said the guarantee facility gives the bank more headroom since the facilities in Zimbabwe need to be cash covered.
“The risk that we need to manage as a bank is that ultimately when money needs to be paid, which is foreign currency in this case, we will be able to make payments. It is useful to have such a structure in place,” Mpofu said.
Old Mutual CEO Sam Matsekete said the meeting was to explore areas the partners could work on.
“We met the delegation of vice presidents from AfDB. Prior to that, we also met the president [Akinwumi Adesina] when he was in the country. The idea being to continue to explore which other areas we can work together. The AfDB is an existing partner of our business and what we will be seeking to do is to continue to strengthen that partnership,” Matsekete said.
