Government secures a five year line of credit
ZIMBABWE has secured a US$250 million line of credit from Gemcorp Capital, an international independent investment management firm focused on emerging markets, for the importation of essential commodities.
In a joint statement, the central bank, the Treasury and Gemcorp said the five-year loan facility would enable the importation of essential and intermediate goods to support the economy.
The facility comes at a time when the country is facing serious foreign currency shortages, largely resulting from poor exports and subdued foreign direct investments.
Zimbabwe also saw its foreign currency requirements increasing since the beginning of the year, largely attributed to improved economic performance, but with no corresponding generation of the hard currency.
This is, however, expected in the short term.
In the long term – when productive capacities are fully utilised – the country is expected to export more and the trend will be reversed.
“The Ministry of Finance and Economic Development, the Reserve Bank of Zimbabwe and Gemcorp Group are pleased to announce that they have signed a $250 million commercial loan facility.
“This five-year facility will enable the importation of essential and intermediate goods to support the Zimbabwean economy,” reads part of the statement.
Minister of Finance and Economic Development Prof Mthuli Ncube welcomed the development saying “granting of the facility by Gemcorp is a strong signal by foreign investors of their growing confidence in Zimbabwe. I expect more investors to follow suit”.
RBZ Governor Dr John Mangudya said the line of credit came at an appropriate time to shore up foreign currency liquidity after the end of the tobacco selling season.
“This, together with other facilities that we have secured, should go a long way to meet the import requirements for essential products and services for the national economy,” he said.
Commenting on the investment, Atanas Bostandjiev, founder and chief executive of Gemcorp Group, said, “with this facility, we are financing and coordinating the delivery of essential goods to help support the Zimbabwean economy. The trade finance gap in Africa remains significant and is an enduring constraint to economic development. The Gemcorp Group remains focused on working with local partners and borrowers across Africa and the rest of the emerging markets to provide creative funding solutions and foster trade and investment in the region”.
The Gemcorp Group comprises a London-based fund manager (Gemcorp Capital LLP) and a physical commodities trader (Gemcorp Commodities Trading). It focuses on emerging markets with a special interest in Sub-Saharan Africa, Latin America and Eastern Europe where the group has established itself as a reliable long-term partner for sovereigns and growth focused private companies.