RBZ brings in $1,3bn off-shore loans

This was before the Government implemented an import substitution programme aimed at supporting the local manufacturing sector and improving exports.

THE Reserve Bank of Zimbabwe (RBZ) has between November 2017 and May this year successfully negotiated for $1,3 billion offshore loans to support the economy, an official said yesterday.

Speaking during a Zim-Trade-Banks breakfast seminar in Bulawayo, RBZ financial markets division principal analyst Mr Tapiwa Furusa said the $1,3 billion offshore funding was one of the initiatives aimed at bolstering local production and promoting exports.

The funding has been secured from AfreximBank and Trafigura, which is one of the world’s leading independent commodity trading and logistics houses.

Mr Furusa said the Central Bank among others, was focused on boosting foreign reserves accumulation as well as bolstering the productive sector to ensure inclusive growth in all sectors of the economy.

In a bid to facilitate the above objective, Mr Furusa said RBZ has successfully arranged for $1,3 billion loans from the offshore to anchor the economy in light of the challenges dogging the economy.

“Our thrust is to have foreign reserves accumulation, increase productivity and inclusive growth and attracting FDI (Foreign Direct Investment).

“During the period November 2017 to May 2018, we have managed to arrange $1,3 billion offshore loans through AfreximBank and Trafigura to support local production and promoting exports,” he said.

In pursuit of its mandate, Mr Furusa said RBZ also has $1,5 billion pending guarantee facility from the AfreximBank, which was presently being negotiated for.

Under the new political and economic order, the country has since November last year been on a drive through the “Zimbabwe is open for business” mantra to mend its relations with the international community so as to attract FDI inflows.

“We have also raised $850 million through other pipeline offshore finance facilities and RBZ has also allocated foreign currency using the priority list biased towards the productive sector and essentials,” he said.

Since adoption of the multi-currency system in February 2009, the local manufacturing sector has faced a host of challenges such as foreign currency shortages and influx of cheap imported products.

Earlier in his address, ZimTrade acting chief executive officer Mr Allan Majuru said his organisation was running technical intervention programmes to facilitate exporters in enhancing their export competitiveness. “For instance we have got MoUs with Pum. These are senior experts from the Netherlands who come to Zimbabwe for at least two weeks at selected companies’ factories to assist in improving factory operational efficiencies.

“The Dutch government funds their air tickets and the host companies have to offer them accommodation and meals, and the experts can even stay at your houses during the period of their working visit,” he said.

As a result of the constraints, the industrial sector is struggling to stimulate productivity to competitive levels.

According to the Confederation of Zimbabwe Industries, capacity utilisation in the manufacturing sector last year stood at 45,1 percent down from 47,4 percent in 2016.

Due to low capacity utilisation levels, the country in recent years became a net importer of cheap goods mainly from countries such as South Africa, and China, among others.