THE announcement, within days of each other, of facilities amounting to $1,7 billion by China and the Africa Import and Export Bank (Afreximbank) is a sign of growing international confidence in Zimbabwe’s new leadership, experts have said.
CBZ Holdings acting chief executive Peter Zimunya said Zimbabwe is charting new pathways that are likely to restore the economy.
“This is only the beginning, it’s a tip of the iceberg, as investors are slowly coming in, making inquiries about investing in the country,” Zimunya told The Financial Gazette.
Zimunya further indicated that the country’s re-engagement efforts, coupled with President Emmerson Mnangagwa’s assurance that foreign investments would be protected, are a strong indicator that Zimbabwe is open for business.
“This is what investors sitting there want to hear, that there is good corporate governance, respect of property rights and effective management of resources,” he said.
Last week, China agreed to provide $220 million in loans and grants for the upgrading and refurbishment of the Robert Gabriel Mugabe International Airport and other infrastructure developments.
On Tuesday this week, Afreximbank, which has several facilities already running with Zimbabwe, announced a further $1,5 billion economic stabilisation package for the country, earmarked for the revival of the productive sector to stimulate more exports and ensure timeous foreign payments.
“We also discussed a number of areas that will involve additional investments from us, something that will be in the order of $1 billion to $1,5 billion that will include certain kinds of guarantees to encourage investors to come into Zimbabwe at this time,” he said after a meeting with Mnangagwa.
Economist Kipson Gundani said the gesture by China and Afreximbank was a vote of confidence in the new administration and will act as a catalyst to pull more funds into the investment-starved southern African country.
“China and Afreximbank have been the country’s traditional funders since the Robert Mugabe era and we are now expecting other international finance institutions to come on board and supply Zimbabwe with cheap capital,” he said.
Gundani, who is the Buy Zimbabwe chief economist, said it would be critical for the new funds to be utilised in bridging the infrastructure gap in the country.
“The priority should be high impact sectors such as utilities electricity and water and quick win industries that have a cascading effect on downstream subsectors,” he added.