The agreement comes at a time when Zimbabwe’s private sector faces a critical shortage of foreign currency for importing raw materials and other essentials after many years of economic decline.
Local banks are unable to provide the capital needed by the mainstays of the Zimbabwean economy such as agribusiness and manufacturing, which are vital for the country’s economic growth and foreign currency generation from export markets.
According to CDC, the facility will last five years.
Standard Chartered Bank said: “We are delighted to partner CDC in providing access to finance in a responsible way; enabling people, businesses and communities in Africa to progress and prosper…
“We have been in Zimbabwe for over 120 years and through this agreement we reinforce our confidence and commitment to the country’s long term economic growth.”
CDC, in 2013, backed Takura, a local Zimbabwean investment fund with a US$23m commitment, which was used to support small and medium enterprises, particularly in the food and agri-processing sectors.
Reserve Bank of Zimbabwe governor John Mangudya welcomed the loan saying this was a significant move in that it is a medium-term facility to be used for the revival of companies in Zimbabwe.
“There has been a deficit of medium-term funding which was not forthcoming to Zimbabwe. This is going to improve the competitiveness of the industry in Zimbabwe in terms of retooling and improvement of productivity,” he told the Herald.
“More importantly, it is a sign of confidence that the international community has found in Zimbabwe. It is a seal of approval or endorsement of Government policies and measures aimed at transforming the economy into a middle income by 2030.
“From the RBZ side, we are pleased by this facility because it will increase exports by Zimbabwean companies.”
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