Multilateral financial institution the African Export-Import Bank (Afreximbank) has signed two agreements worth $80 million with Zimbabwean financial institution CBZ Bank. The deals include a $60 million line of credit and a $20 million Trade Facilitation Program (AFTRAF) facility.
The line of credit will enhance the financial institution’s capacity to support SMEs and export-oriented businesses in Zimbabwe, generating foreign exchange and alleviating the country’s foreign currency pressure. Meanwhile, the AFTRAF will enable CBZ Bank to issue letters of credit confirmed by Afreximbank, addressing financing-related challenges associated with a shortage of confirming banks.
According to Haytham El Maayergi, Executive Vice President: Global Trade Bank at Afreximbank, the credit line and AFTRAF facility “will increase intra- and extra-African trade for Zimbabwe through the importation of critical goods, such as fuel, pharmaceuticals and fertiliser, and support exports and imports of vital goods and services to Africa. It will also enable CBZ to increase its trade activities and to expand its correspondent banking relationships.”
Through the financial support, CBZ Group aims to deploy mobile banking solutions, create employment opportunities and drive financial inclusion in Zimbabwe. The finance will also be used to provide support in terms of export growth.
Acting Managing Director of CBZ Bank Smangele Mandidi said that “as a bank, our core focus remains on sourcing much-needed lines of credit to support the productive sectors of our economy and this will also go a long way in easing the liquidity challenges.”