NDAMU SANDU IN CAIRO, EGYPT
Zimbabwe’s bid to lure foreign investors received a major boost after it signed an memorandum of agreement with the African Export-Import Bank (Afreximbank) for a facility valued at $1,5 billion which provides guarantees to investors.
The facility includes $500 million to stabilise the nostros amid a biting foreign currency challenge.
The guarantee comes under the ZimOpen initiative that is meant to provide assurances to investors that their investments are safe and dovetails with President Emmerson Mnangagwa’s Zimbabwe is Open for Business hymn.
Speaking to journalists after the signing ceremony Friday, Afreximbank president Benedict Oramah said ZimOpen was intended to “de-risk investments” that come into Zimbabwe, that is, foreign direct investments and those who choose to deposit funds in Zimbabwe.
“We have been working on this facility and our objective is to bring it to closure so that it can begin to contribute to the stabilisation of the Zimbabwean economy and returning the economy to growth. We believe that the perception of risk that people see will begin to go
away and what they perceive is not reality,” Oramah said.
“We hope that what we are doing should lead to better investments into Zimbabwe, stability, greater inflows of financial resources and we hope the Zimbabwe of Zimbabwe will be the best for it, seeing their economy getting better, seeing manufacturing returning,” he said adding the bank would support.”
Reserve Bank of Zimbabwe governor John Mangudya said: “What we have signed is to give reassurance to investors that when they bring money bring their money to Zimbabwe, it’s risk-free. It is a guarantee for investors; it stabilises the foreign currency situation.”
Mangudya said the genesis of facility dates back to when Oramah met Mnangagwa where it was put into motion. What was left, he said, “is to ensure the documentation is done”.
Industry, Commerce and Enterprise Development minister Mangaliso Ndlovu said: “We look forward to investors coming in knowing that Zimbabwe is not a risky destination.
In March, Oramah told a “Doing Business in Zimbabwe” session at the Africa CEO Forum in Abidjan, that ZimOpen was aimed at de-risking eligible inward investment into Zimbabwe, catalysing trade finance inflows and increasing the availability of US dollar liquidity in
order to assure investors of more predictability in exit possibilities and terms.
“As Zimbabwe opens its doors to business once again, many entrepreneurs and potential investors seem eager to join the party, but their enthusiasm is often constrained by risk considerations,” he said then.
The Cairo-headquartered bank has been Zimbabwe’s all-weather friend, providing facilities for the importation of essential goods like fuel and has also provided a facility for industries to retool.
In the past 20 years, Afreximbank has disbursed more than $7 billion to Zimbabwean entities in the public and private sectors without suffering any credit losses.
