Zim to get US$10m AfDB facility

LIVINGSTONE MARUFU

The African Development Bank (AfDB) will avail a US$10m facility over the next three years to finance the private sector, amid funding constraints facing local companies.

AfDB country manager for Zimbabwe, Moono Mupotola, told a Confederation of Zimbabwe Industries congress held last week that Zimbabwe could get a similar package after three years.

“The country can get this much through the private sector and cannot access loans in the public sector as it owes us,” Mupotola said.

She said AfDB would fund the local industry under the Private Sector Development Strategy (2022-2026) and this will contribute to the development of large, small and medium enterprises.

“It can also scale up investment and financing to lend to SMEs, provide technical assistance to strengthen SMEs-focused entities and establish linkages to domestic projects or companies, and provide training to ensure a strong talent pool,” Mupotola said, adding that AfDB would also contribute to “linking African enterprises and major projects with potential partners and investors through promotional activities, including the African Investment Forum”.

It can also assist in facilitating and managing investor relations, she said.

The US$10m comes after last month’s visit by a team from the AfDB to scout for opportunities and how the financial institution could help the private sector.

Solomon Quaynor, AfDB’s vice president Private Sector, Infrastructure and Industrialisation, 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 after his visit to Zimbabwe.

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”. 

Mupotola said AfDB would support governments in developing efficient industry clusters continent-wide through technical assistance and funding in implementation and monitoring.

The objective of the facility is to raise the effectiveness of project preparation and create an enabling business environment in order to promote private sector investment and growth.

AfDB focus areas will be capacity building or training of government officials in project design, preparation and analysis.

Mutopola said AfDB’s goal is to mobilise resources and blended finance initiatives to close the financing gap for private-sector-led development of the continent.

“The bank provides a diversified product menu to support non-sovereign operations targeting all sectors, namely agribusinesses, infrastructure and transportation, financial sector development, energy and industrialisation.

“Through our sovereign products, the bank also supports the enabling environment for private sector development by de-risking investment and ensuring public sector stakeholders have the capacity to engage in Public Private Partnership structures.

“The bank also leads strategic partnerships with key private sector clients, financial institutions, and commercial banks to provide a comprehensive support package to private sector clients. The co-guarantee platform is such an example,” she said.

AfDB has in the past few years helped Zimbabwe improve its public finance management systems. This included oversight bodies like the Office of the Accountant General and Parliament.

The bank also offered specialised technical assistance on debt management and support for the restoration of state-owned enterprises.