Afreximbank, RBZ working on Nostro Support facility
THE Reserve Bank of Zimbabwe (RBZ) is finalising a new financial facility with the African Export-Import Bank (Afreximbank) known as the Afreximbank/RBZ Cyclical Nostro and Export Support Facility whose basis is to provide foundation for nostro accounts transactions and improve liquidity in the economy.
Mangudya speaking at a dinner in honour of Benedict Okey Oramah, the president of Afreximbank in Harare last night said local banks nostro accounts have been under siege from customers largely because of the consumptive nature of the economy.
Nostro accounts are key and necessary enablers for a country to pay for its imports and to receive payments for export proceeds due to it
“We are finalising a new financial facility – the Afreximbank/ RBZ nostro export fund facility – and its basis is to provide foundation for those who want to add value to foreign exchange, importing and export. The facility will help stabilise the cyclical cash cycle in an economy that has domesticated foreign currencies to make its official currency,” he said.
Mangudya however did not provide details on the value of the facility but said it would provide support in periods where exports are low, such as between October and February.
The governor said the Afreximbank currently has more than 20 facilities in Zimbabwe totalling more than $700million while it is set to provide $819 million in bridge financing to enable the country to clear its arrears with Bretton Woods Institutions.
He said the bank has contributed to the stability of the financial services sector currently prevailing.
“Deposits have increased, we are now looking at how best can we continue to stabilise the economy and how do we sustain growth in deposits, in order to remain stable, safe and sound,” he said.
Finance and Economic Development Minister Patrick Chinamasa said Afreximbank disburses to
Zimbabwe an average of $500 million per annum through various financing channels.
“Currently the figure is $504.08 million as of January 2016. The support rendered to us targets sectors such as the mining sector, energy sector, financial sector, cotton and tobacco exports, telecommunications sector and tourism sector, among others,” he said.
Government through the Ministry of Finance and Economic Development and Africa Export-Import Bank (Afrexim) in 2011 sealed a $70m Zimbabwe Economic and Trade Revival Facility (Zetref) deal that was meant to breathe life into the country’s economic recovery.
“The transaction made available finance to revamp mines, factories and other productive industry infrastructure starved of critical investments.”
In March 2014, the African Export Import Bank Trade Debt Backed Securities (Aftrades), was launched in Zimbabwe with an initial pool of US$100 million to help in the distribution of liquidity in the banking sector. The facility became operational in 2015, starting at US$100 million and increasing to over US$178 million as of 31 December 2015.
Chinamasa said in addition to that, last year, Zimbabwe secured a US$200 million loan from Afreximbank to import maize. Sable Chemicals also accessed a loan facility of around US$40 million for fertiliser imports.
He said the contribution of Afreximbank on the African continent cannot be under estimated adding that they have as financiers, been at the core of financing various sectors on the African continent.
“The affirmation of Afreximbank commitment to the development of Africa can be witnessed through the planned African Export-Import Bank and the Export-Import Bank of China’s us$1 billion investment programme to accelerate Africa’s industrialisation and trade between China and the African continent.” FinX
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