Afreximbank Boosts Zimbabwe’s Economy with $80 Million in Credit and Trade Facilitation

The AFTRAF facility will enable CBZ Bank to issue letters of credit confirmed by Afreximbank at a time when such instruments are not readily available due to a shortage of confirming banks.

In two deals signed at the recently concluded Afreximbank Annual Meetings (AAM2024), the African Export-Import Bank (Afreximbank) is providing a US$60 million line of credit and a US$20 million Afreximbank Trade Facilitation Programme (AFTRAF) facility to CBZ Bank Limited, Zimbabwe’s largest bank.

The line of credit facility aims to strengthen financial intermediaries' capacity to support SMEs through financing products and capacity building, indirectly supporting export-oriented Zimbabwean businesses and enabling them to generate much-needed foreign exchange. This initiative is expected to ease the pressure on foreign currency in the country.

The AFTRAF facility will enable CBZ Bank to issue letters of credit confirmed by Afreximbank at a time when such instruments are not readily available due to a shortage of confirming banks. This facility is expected to increase intra- and extra-African trade for Zimbabwe, facilitating the importation of critical goods such as fuel, pharmaceuticals, and fertilizers, while supporting exports and imports of vital goods and services to Africa.

Highlighting the impact of the deals for Zimbabwe, Haytham El Maayergi, Executive Vice President of Global Trade Bank at Afreximbank, said: “The US$60 million Line of Credit facility will be used by CBZ Bank to provide financing to local corporates and small and medium-sized enterprises (SMEs) - helping to bridge the financing gap facing them at a time when most international banks are limiting their exposure to Zimbabwean banks. 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.”

The US$20 million AFTRAF facility provides a wide variety of products where Afreximbank takes on the direct risk of CBZ as the issuing bank. This programme is expected to boost Zimbabwe’s trade activities and expand its correspondent banking relationships.

CBZ Group’s strategic plan is to deploy affordable mobile banking solutions, increase its product offerings, create opportunities for direct and indirect employment by financing the importation of raw materials for key industries, and drive financial inclusion in Zimbabwe. Sub-borrowers who are SMEs benefiting from the credit line will also be eligible for non-financial support as provided under the capacity-building pillar of the bank’s Export SME Development Programme.

At the deal signing ceremony, Mrs. Smangele Mandidi, Acting Managing Director of CBZ Bank, stated: “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. We have received USD80 million funding from Afreximbank which will be extended to support export growth through trade finance as well as capital expenditure financing.”

The facility aligns with Afreximbank’s mandate of supporting exports of value-added commodities and manufactures of a Member State. The structured nature of the facility supports Afreximbank’s trade finance leadership, consistent with the bank’s strategy of financing exports, which in turn contributes to the foreign exchange earning capacity of a country and increases productivity.

Hosted by the government of the Bahamas, AAM2024, combined with the third AfriCaribbean Trade and Investment Forum (ACTIF2024), was held from June 12 to June 15.