Afreximbank Comes to Zimbabwe's Rescue

Source from:  Zimbabwe Standard (Harare) December 11, 2005 Our Staff 12/12/2005

THE Africa Export Import Bank (Afreximbank) has availed lines of credit to local financial institutions to finance exports and imports. Standardbusiness heard last week that the institutions that benefited include CBZ, Merchant Bank of Central Africa (MBCA), Interfin and FBC Bank. Interfin got US$10 million in May. It further got US$10 million in October. Interfin MD Ben Chikwanha said the US$10 million the bank got in May was for last year. "Last year's facility which flowed into this facility was approved in October, flowing into 2006," Chikwanha said. Chikwanha said Afreximbank makes available lines of credit from which financial institutions draw down. He said the money caters for exporters from tobacco, mining and manufacturing, among others. Chikwanha said Interfin had utilised the money they got in May and repaid the loan making it legible to apply for another line of credit. FBC MD John Mushayavanhu said the bank got lines of credit totaling US$25 million. Mushayavanhu said the bank got US$10 million in November; US$10 million this month and the US$5 million deal was almost finalised. Mushayavanhu said US$5 million would cater for pre and post shipment financing, while the fuel and grain importation will take up US$10 million apiece. CBZ got a renewal of its line of credit and will use the US$15 million for import and export financing. John Mangudya CBZ Executive Director Corporate and Merchant Banking, said it got a renewal of its line of credit having repaid the loan it received in May. Mangudya said CBZ had got a US$10 million relay facility in May. A relay facility is a self -financing structure whereby an institution imports fuel against tobacco exports. In other words CBZ will import fuel up to US$10 million financed by exports of tobacco. As of October 2005, MBCA had received US$10 million for export financing. Standardbusiness could not get comment from MBCA MD Denys Denya as he was said to be out of office and coming back on Monday (tomorrow). Meanwhile Afreximbank shareholders have approved a US$1.5 million dividend to be paid to member states. The resolutions came at the just ended shareholders' meeting last week. The shareholding structure of Afreximbank is categorised into three groups: Class A made up of African states and African regional and sub regional financial institutions; Class B made up of African public, and private banks; and Class C made up of non African financial institutions and economic organisations. Afreximbank was founded in Abuja, Nigeria, in October 1993 by African governments, African private and institutional investors. The bank owes its origins to the African Development Bank (ADB), which carried out a feasibility study between 1987 and 1992 on the desirability of establishing a regional institution to provide trade finance facilities meant to promote trade. Its mandate is to stimulate a consistent expansion, diversification and development of African trade while operating as a first class profit-oriented financial institution and a centre of excellence in African trade matters. Afreximbank, which commenced operations on 30 September 1994, is headquartered in Cairo with branches in Abuja, Tunis and Harare. This year, Afreximbank has become Zimbabwe's foremost foreign financier after availing US$195 million for grain importation (US$75million), fuel importation (US$25 million) and export finance (US$95 million). Enditem