The African Export-Import Bank (Afreximbank) has earmarked US$400 million for Zimbabwean-based pan-African firms seeking to undertake investments across the continent, a development expected to give further impetus to the region's integrated industrialisation agenda.
The bank's executive vice president Denys Denya told delegates during the SADC Industrialisation Week (SIW) investment conference in Harare yesterday that the bank had assisted several leading corporates on the continent to enter new markets.
Among these are Nigerian billionaire Aliko Dangote's cement projects in Ghana and Tanzania, Econet Group's expansion into the rest of Africa as well as Arab Contractors' venture into Tanzania and East Africa.
"I am happy to announce that we have set aside US$400 million for Zimbabwean-based pan-African corporates who want to venture into the continent.
"We recognise the fragmented nature of production systems in the region, that is why we have rolled out our initiative for supporting the emergence, expansion and export trading expansion of companies to aggregate products for the export markets," he said.
The support, Mr Denya said, was critical to closing the big gaps in trade and market information and priorities for key sectors, such as agriculture, by providing financing for critical value chain mechanisms.
"In this regard, we have disbursed US$3,5 billion to export trading companies operating in the region in such countries as Tanzania, Malawi, Zambia and Zimbabwe; integrating agriculture into the region as well as global value chains," said.
Mr Denya added that the bank was deepening its support to accelerate and transform economies in the region and would soon conclude a US$300 million facility for companies in Malawi in support of production, processing and exporting activities.
"Similar arrangements are underway for other markets in the region and the rest of the continent.
"The bank is also implementing the intra-Africa engineer, procure and construct EPC contract promotion initiative, supporting the development of trade infrastructure across the continent," he said.
The SIW, to be officially opened by President Mnangagwa tomorrow, is the largest public-private platform and consultative body for industrialisation in the region.
It is being held under the theme "Promoting Innovation to Unlock Opportunities for Sustainable Economic Growth and Development Towards an Industrialised SADC".
SIW is also a precursor to the 44th SADC Heads of State and Government Summit to be held in Harare on August 17, where President Mnangagwa will assume the chairmanship of the regional bloc.
Afreximbank Group Acting director for trade facilitation and investment promotion, Dr Gainmore Zanamwe, told the SIW conference that the regional financier had a range of products to help enterprises navigate the investment environment, not only in SADC but across Africa.
"Some of the major projects Afreximbank has supported in the SADC region, include the US$70 million financing and provision of investment guarantees that unlocked US$300 million for the ZimBoarders project in Zimbabwe -- and about US$100 million investment towards the Afreximbank African Trade Centre,which we are building here in Harare," he said.
In Botswana, Dr Zanamwe said the regional financier extended US$44 million for a diamond mining operation.
"In Angola, we are providing US$100 million for the Cabinda Oil Refinery to provide Angola with refining capacity so that they don't import refined products.
"We are also working with a petrochemical fertiliser plant in Angola and we have provided US$529 million to Nyanza Light Metals titanium dioxide plant in South Africa.
"Our goal is to do more, and my hope is that this investment forum becomes the platform that generates a pipeline of investment projects that will stir the industrialisation of SADC.
"Afreximbank is unwavering in its dedication to catalyse the transformation of trade and investment across the country."
This comes against the background of the SADC Industrialisation Strategy and Roadmap, 2015-2063, which was approved by the SADC Extra-Ordinary Summit in Harare in April 2015.
The initiative is meant to transform regional economies to enhance economic growth and create empowerment.
Despite persistent efforts to boost trade within the region through the SADC Free Trade Area, the value of intra-SADC trade remained very low, at plus or minus 17 percent of total SADC trade.
Exports from the region continue to be dominated by unprocessed or minimally processed products mainly from the agricultural and mineral sectors, thus providing very low-value returns.
Such a low level of intra-regional trade clearly shows that the great emphasis placed on tariff elimination has not brought about the intended socio-economic development, nor the enhancement of quality of life and the well-being of our people.
To address this challenge, SADC agreed to act collectively, as a region, to implement effective strategies that boost the productive capacity of our industries, develop infrastructure that leverages industrialisation and promotes technological advancement.
Speaking at the same event, Finance, Economic Development and Investment Promotion Minister Professor Mthuli Ncube said SADC accounted for an average of 28 percent of Africa's Gross Domestic Product, 26 percent of Africa's total population and attracted 30 percent of total foreign direct investment inflows into the continent over the last decade.
He said according to the International Monetary Fund (IMF) Regional Economic Outlook for April 2024, the region was among the eight Regional Economic Communities (RECs) working towards the integration of the continent.
Prof Ncube said developing countries were grappling with increased debt vulnerabilities and this is hindering development and industrialisation in SADC.
"It is apparent that developing countries are grappling with heightened vulnerabilities as indicated by subdued solvency and liquidity indicators.
"In this regard, debt restructuring initiatives and more effective implementation of debt relief programmes such as the G20 framework would free up financial resources which can be channelled towards industrialisation, drive economic progress and development.
"In fact, we have argued in other fora globally, that the G20 framework needs to be transformed," he said.
Against this background, Prof Ncube said it is imperative to reform the global financial architecture to support the industrialisation agenda in the region.
"The global financial architecture is tilted against the developing countries from a low share of SDRs (Special Drawing Rights) quotas that were extended by the IMF.
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"Three years ago, as Zimbabwe we used to borrow at something like 8 percent per annum, right now we are borrowing at about 12 percent in terms of the debt that we are able to access and this has nothing to do with the credit rating of the country and every other country can tell you a similar story," he said.
Industry and Commerce Minister Mangaliso Ndlovu said SADC should pursue the industrialisation agenda to avoid the consequences such as the region becoming a mere consumer of products from across the globe.
In this light, the Government is pursuing the industrialisation agenda across different value chains that include the Cotton to Clothing Value Chain, and the Leather Value Chain, as assigned under the SADC Industrialisation Roadmap.
With the opening up of wider markets such as the African Continental Free Trade Area (AfCFTA), the region faces stiffer competition from products produced across the continent.
The AfCFTA, to which Zimbabwe is a signatory, aims to eliminate tariffs on 90 percent of goods traded between member States over 10 years.
The objective is to foster regional economic integration and boost intra-African trade by 53 percent by next year with the potential to create up to 30 million jobs and lift 30 million people out of poverty.
Among other goals, the AfCFTA which was operationalised in January 2021 also seeks to streamline customs procedures, reduce bureaucracy, and harmonise technical standards to ease the movement of goods across the continent's borders.
Minister Ndhlovu challenged investment promotion agencies in SADC to take advantage of the SADC Industrialisation Week (SIW) and Investment Conference to face head-on the daunting challenge of attracting quality investments into the region.
