THE African Development Bank (AfDB) will continue providing millions of dollars in funding to support Zimbabwe's private sector as the country struggles to secure fresh external funding due to its outstanding debt.
Zimbabwe's total debt stands at US$21 billion.
About US$13 billion of this amount is owed to foreign creditors.
Speaking at the AfDB–led 6th High-Level Structured Dialogue Platform, AfDB president Akinwumi Adesina stated that the bank had extended over US$4,2 million to facilitate dialogue on the country's debt arrears. Additionally, the bank is developing a US$100 million risk agency line of credit for Old Mutual Zimbabwe and Cabs.
“At the African Development Bank, we will continue to strongly support Zimbabwe, within the limits of what we are able to do, until the situation changes. The African Development Bank is strongly supporting the private sector in Zimbabwe,” Adesina said.
“Between 2023 and 2024, the bank provided a total of US$55 million in lines of credit, including US$25 million to the Central Africa Building Society, transaction guarantee of US$15 million to the NMB Bank, and US$15 million transaction guarantee to the First Capital Bank.”
He said the bank’s support of US$25 million for an emergency food production facility project, approved in July 2022, was delivering impacts on food security amid this year’s drought.
The facility has supported over 31 000 farmers, of whom 35% are women. This led to increased food production to over 65 000 hectares (ha) of land, with a target to reach 200 000ha.
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As Zimbabwe deals with the devastating effects of droughts from El Niño, Adesina said, the bank’s support to mitigate these risks included disaster risk insurance, which would now be scaled up with an incoming grant of US$47,5 million for both Zimbabwe and Malawi. The outgoing AfDB boss pledged to seek further financial support to assist Zimbabwe to clear its debt.
“The second part is that next year, the African Development Bank has what we call the African Development Fund, which is the fund that we have used to clear arrears for other countries. We have done that for Sudan. We have done that for Somalia,” Adesina said.
“So now that we have clarity of that, we are going to be making a request to have it set aside during the African Development Fund 17 Convention to allow for resources to clear the arrears of Zimbabwe.”
Adesina said the pan-African bank had also supported the government in recruiting a global firm to come up with timelines for meeting the goals of the arrears clearance process.
“So, we are looking at that very closely. So that is the plan that we have. It is going to be kicking off next year with that, and I think at the end of the day, if you take the ice block out of a fridge and you put it out in the sun, what is clear is that eventually it is going to fall,” he said.
“And we have been in the thawing process of getting that. I am very confident we can get that. The diplomatic community has been very supportive. All the ambassadors have been very supportive.”
