Editors Desk
"Dollars of hope land in Zimbabwe."
Where there is investment there is always hope.
A side-note from last week’s massive Intra-African Trade Fair in Durban, South Africa, lent another small glimmer of hope for the troubled sleeping lion that is the Zimbabwe economy.
I believe a revival in the economic hopes of Zimbabwe would be a boost for the economy of the whole of Southern Africa.
The latest glimmer came from the African Export-Import Bank (Afreximbank )in Durban as it signed financing agreements with four entities in Zimbabwe to the tune of $188 million.
The money will help the Zimbabwe Electricity Transmission & Distribution Company (ZETDC) invest in smart and prepaid meters to help collect revenue.
Household name the Central African Building Society gained a US$40 million facility to support its participation in a syndicated facility aimed at improving the supply of electricity in Zimbabwe by paying debt and the importation of prepaid meters.
The third transaction, a US$28.2 million dual-tranche facility, was agreed with Central Bank of Zimbabwe for scarce foreign currency. There will also be $10 million to finance power generation and transmission – one of the pillars of growth that have been crumbling in Zimbabwe for decades.
Now $188 million might sound like a flea bite when you are talking about rebuilding a nation after more than two decades of decline.
But when you compare this figure to the mere $194 million the country garnered in foreign direct investment in 2020 in the wake of Cyclone Idai and COVID-19 it puts it into perspective. Zimbabwe was attracting $745 million in FDI in 2018.
The financing of electricity supply will undoubtedly help the Zimbabwe economy – expected to grow by 5.1 per cent this year – out of the woods. Entrepreneurs on the ground have told Billionaire Tomorrow things are looking up.
A note from Lloyds Bank says among Zimbabwe’s strong points, when it comes to foreign investment, are rich mineral resources and improving relations with the international community after years of frostiness in the days of President Robert Mugabe.
Yet, Lloyds also says that Zimbabwe need to sort out hyperinflation, crumbling infrastructure and what it calls a precarious food and health position where the majority of the population relies upon international aid.
This $188 million to boost electricity is a small part of getting the economy ready for more growth. It is precious and needs to be put to work from the day it hits the ground in Harare. I hope it will.
