African Bank Launches Crucial Fund for Zimbabwe to Revive Battered Economy
The bank will provide US$50 million and the Zimbabwe government US$20 million sourced from its IMF's Special Drawing Rights account
The credit facility will see the bank disbursing the money in two tranches with the initial tranche of US$70 million aimed at boosting the agriculture and manufacturing sectors through the acquisition and replacement of obsolete equipment. The Africa Import and Export Bank has launched a US$100 million loan facility in conjunction with the Zimbabwean government in an effort to revive the country's battered private sector. Reports said the Zimbabwe Economic and Trade Revival Facility was launched on Monday in Harare by Prime Minister Morgan Tsvangirai, Finance Minister Tendai Biti and representatives of the bank. The credit facility will see the bank disbursing the money in two tranches with the initial tranche of US$70 million aimed at boosting the agriculture and manufacturing sectors through the acquisition and replacement of obsolete equipment. The bank will provide US$50 million and the Zimbabwe government US$20 million sourced from its International Monetary Fund’s Special Drawing Rights account. According to the reports, the second tranche amounting to US$30 million will be targeted at supporting the acquisition of spares and raw materials for the private sector. The Zimbabwe economy faces liquidity problems due to lack of capital. Average industrial capacity utilization currently stands at 45 percent in an economy set to grow by 4.5 percent this year. While economists see the loan facility as a positive development in boosting the country’s growth, they are skeptical that the funds may be diverted for other purposes. Deputy Chairman of the Zimbabwe Coalition on Debt and Development, Masimba Kuchera, told VOA Studio 7 reporter Gibbs Dube that government needs to tightly monitor the loan facility.