Reserve Bank of Zimbabwe (RBZ) governor John Mangudya told state media on Thursday that this is the first direct commercial loan to Zimbabwe by the UK government in over two decades and the facility would go a long way in improving local firms’ competitiveness.
“This is a significant move in that it is a medium-term facility to be used for the revival of companies in Zimbabwe,” Mangudya said.
He added: “More importantly, it is a sign of confidence that the international community has found in Zimbabwe. It is a seal of approval or endorsement of government policies and measures aimed at transforming the economy into a middle income (nation) by 2030.”
The facility is a joint initiative between the UK government’s CDC Group, which was formerly known as Commonwealth Development Corporation, and London-based Standard Chartered Bank. The CDC is the UK’s development finance institution.
CDC chief executive Nick O’Donohoe said the facility is expected to benefit companies from several sectors, including food processing, manufacturing and agriculture.
The loans would be for periods up to three years and can be used for capital expenditure or working capital.