RBZ calls for calmness

ZIMBABWE started drawing down from the US$150 million African-Export Import Bank (Afreximbank) facility last week as authorities continue to locate avenues of stabilising the availability of key products such as fuel and raw materials for the manufacturing sector.

The US$150 million Afreximbank facility, which is competitively priced in tandem with international standards, is also designed to cater for the importation of crude oil for cooking oil, soya beans, medical drugs and fertilisers.

This comes as the Reserve Bank of Zimbabwe (RBZ) has called for calmness in the economy, saying there is no need to panic and hoard commodities.

RBZ Governor, Dr John Mangudya said this last week while explaining the fuel situation in the country.

“This week (last week) we are starting to draw down the US$150 million facility from Afreximbank.

“That will go a long way to supplement the foreign currency resources (we have) and also to ensure that at least Zimbabwe remains liquid over the next months, up to the end of the year as we continue to provide more resources for this economy,” said Dr Mangudya.

Zimbabwe experienced fuel shortages two weeks ago, mainly due to logistical issues, as the central bank had allocated foreign currency for its importation.

The RBZ provides foreign currency to fuel importers every week, usually on Tuesdays, since local dealers are expected to pay cash up front.

Fuel importers such as Total Zimbabwe, Zuva Petroleum and Trafigura Zimbabwe, among others, confirmed to the Parliamentary Portfolio Committee on Energy last week that they get their foreign currency allocations.  Trafigura Zimbabwe is a 51/49 percent joint venture between Sakunda Holdings and the Singapore-based Trafigura International.

Mr Kudakwashe Tagwirei, founder of Sakunda Holdings, said they bring fuel into the country and hold it in bond in Msasa, Harare, so that in the event of fuel supply bottlenecks, there is adequate cover.

“For us, we hold 200 million litres of fuel at any given time in bond, but this time around I think we held 140 million litres.

“Whenever there is a problem, the time we take to solve that problem is very short. In Zimbabwe, if we have problems with fuel, it will not take more than two days (to resolve) but in other countries such as Nigeria, it takes up to a month or so,” said Mr Tagwirei.

In cases where foreign currency is not readily available in the country, Trafigura Zimbabwe provides fuel and gets paid later.

The future is bright

Dr Mangudya said the future is bright.

“In short we are saying the outlook looks positive, the outlook is stable, we have found solutions for the outlook, (and) in the outlook, we want people to use fuel sparingly, not to hoard it.

“It’s very dangerous to hoard fuel because it can explode at some point in time. So in this case, let fuel remain in the service stations.”

The Cairo-based Afreximbank has become Zimbabwe’s all-weather friend, providing funds for economic transformation.

It has backed the country’s US$200 million bond notes facility.

Afreximbank has also pledged US$1,5 billion to stabilise the economy, as well as providing investment guarantee to investors.