Zimbabwe to get $1.5 billion package to boost foreign investment

Zimbabwe to get $1.5 billion package to boost foreign investment

Zimbabwe is set to receive investment guarantees worth $1.5bn as the country works on boosting investor confidence after being starved of foreign direct investment for more than two decades.

According to the Reserve Bank of Zimbabwe (RBZ), the African Export-Import Bank (Afreximbank) has promised a financial package to guarantee foreign investment into the Zimbabwean economy.

In his 2018 monetary policy statement on Wednesday, RBZ governor John Mangudya said the Zimbabwean central bank is “working with the African Export-Import Bank (Afreximbank) to put in place a $1.5bn facility that is earmarked for the provision of guarantees”.

Of the amount, $1bn will go towards the guarantees while the balance of $500m will go towards liquidity support.

Mangudya said such guarantees and liquidity support are necessary to protect investor funds from country risk and enhance investor confidence.

As part of the confidence-boosting measures, the RBZ also ringfenced foreign portfolio investment on the Zimbabwe Stock Exchange (ZSE).

Foreign investors on the bourse have been struggling to repatriate both principal capital and capital gains, with some resorting to buying Old Mutual Plc shares for onward sale on the JSE and the London Stock Exchange. Read more on this here.

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