HARARE – The African Export-Import Bank (Afreximbank) on Tuesday announced that it will construct a multimillion-dollar southern Africa head office in Harare, which will house a hotel and an exhibition centre.
The lender appeared to be consolidating its relations with Harare, which continues to be shunned by financiers due to high default rates triggered by a relentless economic crisis.
It immediately set tough conditions for Zimbabwean contractors seeking to clinch construction deals, saying only those who can prove capacity to handle $50 million projects will qualify.
“The bank intends to construct its southern Africa regional office and trade centre on a 12 000 square metre plot of land in the Newlands area in Harare, Zimbabwe,” Afreximbank announced in a media release on Tuesday.
“The 20 000 square metre iconic mixed-use business complex shall provide an integrated one stop shop for trade facilitation and information services and trade finance and offer a range of facilities,” the press release noted.
Headquartered in Cairo, Egypt, Afreximbank’s role is to provide financing solutions and advisory services for the expansion, diversification, promotion and development of intra-and extra-African trade.
Despite Afreximbank’s confidence on Harare, Zimbabwe’s debt to the lender surged by 66 percent to US$1,25 billion in June last year as the southern African nation continued to borrow for consumptive purposes.
The Cairo-based bank, which has extended several loans to Zimbabwe in the past, remains one of the few international institutions still lending to the country, which is struggling to service nearly US$8 billion arrears to multilateral institutions such as World Bank.
Finance minister Mthuli Ncube said in May last year, the country was forced to incur a US$500 million loan from Afreximbank to supply the interbank foreign currency market.
“The figure was US$753 million and then you add the other US$500 million so that takes us to US$1,25 billion,” he said.
The additional US$500 million is expected to stabilise the foreign currency supply in the economy and address liquidity challenges.
“Afreximbank has accepted our request to lend us and we are very pleased that they were able to do so. This will go a long way in assisting Zimbabwe and this is a most welcome development, given that it is very tough out there to raise funds globally to support the economy, the recovery agenda and we should be very pleased as this bank has come forward to assist us in this manner when many will not,” Ncube added.
The regional lender also recently availed US$255 million letters of credit to Zimbabwe for fuel imports and the production of basic commodities in a bid to ensure adequate input supplies to the local market.