africa Banking Economy Finance Zimbabwe

Zimbabwe turn to African banks for assistance as crisis deepens

Approximate reading time: 1 minute

It is understood that the Reserve Bank of Zimbabwe has borrowed a total of $958 million from several African banks.

The central bank intends to purchase fuel and other essentials as the country’s shortage crisis worsens.

According to RBZ governor, John Mangudya the central bank has borrowed $25 million from the Mozambican central bank, $641 million from multilateral lender Afreximbank and, $152 million from the Eastern and Southern African Trade and Development Bank. The loans have a tenure of three to five years and RBZ expects to repay the loans through future gold earnings.

“These loans are well structured facilities contracted last year. They will be paid from future export receivables” Mangudya said.

Gold is Zimbabwe’s top foreign currency earner and the government predicts production will increase this year. Currently, the country is unable to receive any funding from international lenders due to outstanding arrears. As a result, the southern African state has turned to lenders within the continent.

Emmanuel Chilamphuma is a Senior Analyst at Edgebold Capital

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