The Central Bank of Zimbabwe’s Governor, John Mangudya on Wednesday announced that the Bank is currently negotiating a $1.5 billion guarantee with African Export-Import Bank (Afreximbank) to ensure foreign investors’ funds are protected.
“Such guarantees and liquidity support are necessary to protect investors’ funds from country risk, and in doing so, enhancing investor confidence,” said Mangudya said in a monetary policy speech.
This comes two months after Afreximbank said that it was set to inject $1.5 billion to stabilise the country’s economy, as well to provide investment guarantee to investors that the bank will take responsibility for their investments in the country.
Over the years, AfreximBank have continued to show its support for the government and people of Zimbabwe and promised to continue under the leadership of President Emmerson Mnangagwa.
Afreximbank entered into a memorandum of understanding (MOU) with the Reserve Bank of Zimbabwe (RBZ) last year, to provide a $600-million nostro stabilisation facility line of credit. As of January this year it has collected $450 million out of the latest $600 million secured from the Afreximbank.
“So far we have drawn down $450 million, which we are still disbursing. It has made an impact to us. The money is still there, it’s being disbursed slowly because we are running an economy and the idea is not to flood the market,” Dr Mangudya told The Herald Business on the sidelines of the World Economic Forum annual meeting in Davos last week recently.
The nostro stabilization facility will help close the demand and supply gap on foreign currency in Zimbabwe, which is suffering from lack of foreign currency.
Currently Zimbabwe is recording a lot of strides as it tries to recover its economy. The country’s Foreign investment inflow in the past 60 days has surpassed the yearly inflow it recorded in the past years. International investors are now looking at Zimbabwe as an investment destination.