Africa trade bank ratifies $70m loan to upgrade Beitbridge
The African Export-Import Bank (Afreximbank) has ratified a US$70m (R1bn) loan to finance the facelift of the Beitbridge border post in Zimbabwe to boost intra-Africa trade.
Beitbridge border is Southern Africa’s busiest land border, with up to 25,000 people and 500 trucks crossing it daily during peak periods.
Trucking companies complain that in some instances it takes about five days for trucks to be cleared at the border post.
Also, as a result of the state of the border, haulage operators have been forced to use longer and less efficient routes to the detriment of trade.
The approval of the loan facility and investment guarantee to upgrade the border post will greatly reduce waiting times and improve its operational efficiency and effectiveness.
The border’s makeover is earmarked to facilitate trade, at a time when the continent is implementing the African Continental Free Trade Area, which was officially launched in January 2021 to limit barriers and boost intra-Africa trade.
IT IS TOO COSTLY TO WAIT FOR ALMOST FIVE DAYS AT THE BORDER TO DELIVER GOODS AND SERVICES ACROSS SOUTHERN AFRICA
In a statement on Wednesday, Afreximbank president Benedict Oramah said the improvement of the Beitbridge border post was critical to reduce costs associated with traffic delays.
“It is too costly to wait for almost five days at the border to deliver goods and services across Southern Africa. With this facility, we aim to cut indirect and direct costs of trade associated with border post effectiveness and efficiency,” he said.
Under the loan, Afreximbank said it had allocated a US$43m senior-term loan facility to Zimborders Mauritius and US$27m to Pembani Remgro Infrastructure Fund, which are both contracted for the project.
“The financing facility forms part of a US$204.4m syndicated senior-term loan facility for which Afreximbank was among a consortium of financial institutions acting as mandated lead arrangers and senior debt lenders,” said Afreximbank.
The Beitbridge border post upgrade project, which is a public-private partnership, is the first of its type in Zimbabwe and is bankrolled by African financial institutions that have come together to provide commitments.
In addition to Afreximbank, other participating financial institutions include FirstRand Bank, Absa, Nedbank, Standard Bank and the Emerging Africa Infrastructure Fund.
The upgrade of the border post will include the procurement of technical equipment and software.
Investments will be made in Beitbridge town, including developing a fire station, residential building units, housing sewer lines, housing electrical supply lines, a reservoir, water pipelines, a wastewater treatment plant, a water pump station and other infrastructure.