The African Development Bank (AfDB) has granted Zimbabwe $5.32 million to improve the governance and accountability of State-owned entities. The grant is part of the Institutional Support for State Enterprises Reform (Isser) project, which aims to strengthen the governance and management of public entities, reduce fiscal risks, and facilitate economic recovery. The project began in August 2022 and will run until September 2026. AfDB said, in its procurement notice released last Thursday:
<blockquote>
The government of Zimbabwe has received a grant, an amount of UA4 million (US$5,3 million) from the African Development Fund, to finance the Institutional Support for State Enterprise Reform project.
This project aims to strengthen good governance and enhancing accountability through supporting interventions regarding public administration, improved service delivery and financial management (PFM). The project will enhance Zimbabwe’s capacity to effectively translate into action and implement the existing corporate governance and PFM provisions.
</blockquote>
The grant comes from AfDB’s African Development Fund, which supports economic and social development in 38 least-developed African countries through concessional funding for projects and technical assistance, <a href="https://www.newsday.co.zw/business/article/200021468/zim-govt-receives-afdbs-us53m-grant">NewsDay</a> reported. The funds will be used to enhance accountability, improve public administration, service delivery, and financial management. The project will also support the implementation of the hybrid ownership model for State enterprises and parastatals.
Zimbabwe requires State enterprise reforms as over 100 State-owned entities are technically insolvent. Weak corporate governance, corruption, poor financial performance, and ineffective monitoring and evaluation have limited their ability to deliver services. The challenges facing these entities include outdated technology, inadequate working capital, and huge debt overhang. The AfDB grant aims to address these issues and support the recapitalisation of State entities.
The government of Zimbabwe is also considering the partial or full privatisation of State-owned enterprises as part of the reform process. The AfDB grant will contribute to strengthening governance and management practices, reducing fiscal risks, and promoting economic recovery in Zimbabwe.
<h3><a href="https://www.pindula.co.zw/">More Pindula News</a></h3>

Pindula News

Zimbabwe Receives US$5.32 Million Grant From AfDB For SOE Recapitalisation

Zimbabwean journalist Hopewell Chin’ono, says there is a potential risk of the Zimbabwean debt clearance process collapsing due to the anger of European Union (EU) leaders in Brussels. He attributed this anger to the continuous attacks against the EU in Zimbabwe’s state media. The strained relationship between Zimbabwe and the EU began after the August 23, 2023, harmonized elections, when ZANU PF launched unwarranted attacks on the EU for criticizing the election process as chaotic.
Zimbabwe has significant debt owed to various international creditors. The debt clearance process is overseen by former Mozambican president Joaquim Chissano and the African Development Bank president, Dr. Akinwumi A. Adesina. Chin’ono said:
<blockquote>
My media contacts in Brussels said that this coming week is crucial for Zimbabwe as the EU is more likely to move and end the attempts to reengage with Zimbabwe unless President Mnangagwa moves to save the process. The European Union ambassador to Zimbabwe, Jobst von Kirchmann, who has been more than helpful to the Zimbabwean Government has been left with an upset headquarters in Brussels and an unhelpful ally in Zimbabwe.
Sources in the diplomatic community said that he tried his best to keep Zimbabwe off the pariah list but the Zimbabwean Government has failed to help him by doing the bare minimum to keep the debt clearance process going. How President Mnangagwa reacts and deals with this crisis will determine whether it will stay alive or die this coming week. 
China also wanted the debt process to work because it is owed by the Zimbabwean Government. The collapse will mean that Zimbabwe might end up defaulting on all its loans and will not be able to borrow new funds and the economy will further crumble. Americans will feel vindicated if the process collapses, Africans who were working on it will feel betrayed by the Zimbabwean Government, and the EU ambassador will at least say that he tried, but it wasn’t good enough.
</blockquote>
According to <a href="https://www.devere-zimbabwe.co.zw/news/Zimbabwe-aims-to-clear-overseas-debt-by-end-of-2025">DeVere Zimbabwe</a>, one of the world’s leading independent financial consultancy, Zimbabwe’s total public and publicly guaranteed debt stood at $18 billion in December 2022, made up of $12.8 billion in foreign debt and $5.2 billion in domestic debt, as per a debt bulletin published by the treasury.
<h3><a href="https://www.pindula.co.zw/">More Pindula News</a></h3>

Chin'ono Says The Zimbabwean Debt Clearance Process Could Collapse

The African Development Bank (AfDB) plans to aid Zimbabwe in raising $3.5 billion to compensate white farmers evicted from their land more than two decades ago, as a requirement for the nation’s largest creditors to accept a proposed debt-clearance program. 
Akinwumi Adesina, the bank’s president, stated that they are working with the government to formulate a financial instrument that could leverage the capital markets to fund the compensation without adding debt to Zimbabwe, according to <a href="https://www.news24.com/fin24/economy/watch-afdb-to-raise-r67bn-to-compensate-white-zimbabwean-farmers-20230516">News24</a>. He told reporters in the capital, Harare, on Monday:
<blockquote>
We are currently working with the minister of finance and the government of Zimbabwe to develop a financial instrument that could potentially be useful. It will help leverage the capital markets to fund the compensation, without adding debt to Zimbabwe.
</blockquote>
The government has missed repayment deadlines for an accord signed in 2020 to compensate white farmers, and discussions with creditors are ongoing after elections later this year.
While it initially envisioned paying the farmers over 20 years, that period has now been reduced to a decade, according to Finance Minister Mthuli Ncube.
The southern African nation concluded a fourth round of talks with creditors on Monday on the clearance of $17 billion it owes to multilateral lenders, including the World Bank and Paris Club.
More discussions are planned after elections scheduled for later this year.
Some context:
Zimbabwe implemented a <a href="https://www.pindula.co.zw/Third_Chimurenga/">fast-track land reform program</a> in the early 2000s that saw the seizure of land from white farmers and its redistribution to black Zimbabweans. The program was marred by violence and accusations of corruption and mismanagement, with many white farmers evicted without compensation.
In 2020, the government signed an agreement to compensate affected white farmers with $3.5 billion over 10 years, although the compensation process has been slow and missed repayment deadlines. The compensation issue is a condition for Zimbabwe’s largest creditors to accept a proposed debt-clearance program.
<h2><a href="https://www.pindula.co.zw/">More Pindula News</a></h2>

AfDB To Help Zimbabwe Compensate Evicted White Farmers

Joachim Chissano, former Mozambican President, arrived in Zimbabwe yesterday ahead of the second structured dialogue platform Indaba on debt that will be held on Thursday.
The Indaba which is between government, creditors and development partners is meant to discuss economic and governance reforms to anchor the <a href="https://www.pindula.co.zw/Zimbabwe_Public_Debt">arrears clearance and debt resolution process</a>, according to Chronicle.
Chissano was met by Finance and Economic Development Deputy Minister <a href="https://www.pindula.co.zw/Clemence_Chiduwa">Clemence Chiduwa</a> at Robert Gabriel Mugabe International Airport.
He will co-chair the meeting with African Development Bank president Dr Akinwumi Adesina.
President <a href="https://www.pindula.co.zw/Emmerson_Mnangagwa">Emmerson Mnangagwa</a> last year appointed former President Chissano as the high-level facilitator of Zimbabwe ‘s arrears clearance and debt resolution process, while Dr Adesina was appointed champion of the process.
Zimbabwe owes US$14 billion to multilateral financial institutions, bilateral partners, and other creditors.
Speaking to journalists on his arrival, former President Chissano said: 
<blockquote>
I have come here on the invitation of both President Mnangagwa and AfDB president Adesina. We will be launching the second meeting to deal with the arrears and debt of Zimbabwe.
I have been asked to be the facilitator of this discussion between Zimbabwe and key stakeholders so I am here for that.
</blockquote>
Former President Chissano said preparations for the meeting will start today, with preliminary engagements with stakeholders.
Deputy Minister Chiduwa expressed the country’s gratitude for the role being played by the former Mozambican leader. Chiduwa said:
<blockquote>
As a way forward in terms of what we have done so far, in December (last year) we had our first meeting and that meeting focused on how best we can go forward.
</blockquote>
The inaugural structured dialogue platform meeting agreed on three pillars for implementation, namely economic reforms and stability, governance reforms and land tenure and compensation of white former commercial farmers, including the resolution of bilateral investment protection and promotion agreements. Chiduwa added:
<blockquote>
This then led to two areas, those areas that we are referring to as reform areas.
We have the reform area on economics and the governance area. So, having met with our creditors and the development, we managed to come up with a reform matrix and that is what we are going to discuss now on Thursday.
</blockquote>
Meanwhile, some analysts are sceptical of the impact Chissano will have on the Zimbabwean debt. 
In a Twitter post seen by Pindula News, an Economic blogger, Tinashe, twitter handle Baba_nyenyedzi, said:
<blockquote>
Zimbabwe is in a debt trap. Will Chissano be able to move things forward? Zim authorities are not yet ready for the creditor discussion. The hope is that Chissano might unlock political willingness. As usual Zim authorities believe they can tell creditors what to do.
</blockquote>
The government says the High-Level Visit reflects the ongoing foreign policy thrust by Zimbabwe of re-engaging International Financial Institutions for purpose of international debt clearance and access to international finance.
<h2><a href="https://news.pindula.co.zw/">More Pindula News</a></h2>

Chissano In Zimbabwe For Debt Clearance Indaba

African Development Bank (AfDB) president, Akinwumi Adesina has said Zimbabwe will again be the breadbasket of Africa.
He made the remarks at the three-day-long Africa Investment Forum Market Days 2022 which ended Thursday in Abidjan, Côte d’Ivoire. <a href="https://www.newzimbabwe.com/afdbs-boss-predicts-zim-to-restore-africas-breadbasket-status-injects-us4-million-into-debt-clearance-secretariat/">NewZimbabwe.com</a> quoted him as saying:
<blockquote>
The bank’s approved a US$4 million grant to support the development of a secretariat to move the country’s debt arrears clearance issue forward.
</blockquote>
<blockquote>
I know the story of Zimbabwe, the opportunities and potential of Zimbabwe. I think Zimbabwe is not as risky as you think. Private sector opportunities are limitless. 
Zimbabwe is strongly committed. Zimbabwe will again be the breadbasket of Africa. I will swim right beside you.
</blockquote>
Adesina outlined the country’s many potential areas for investment, including steel, agriculture and information technology.
He said the bank was lending support in these and other sectors.
AfDB also made a grant to Zimbabwe during the COVID-19 pandemic.
His remarks come as the southern African nation is currently grappling with an estimated US$17 billion debt, which is 61.6% of the Gross Domestic Product (GDP) as of June 2022.
Of this total debt, publicly guaranteed debt of US$13,2 billion is external while US$3.5 billion is domestic debt.
Interests and penalties for the past two decades are estimated at US$6.6 billion.
Zimbabwe was known as the breadbasket of Africa until the turn of the millennium, exporting wheat, tobacco, and corn to the wider world, especially to other African nations. However, today, Zimbabwe, is a net importer of foodstuffs from the Western World due to climate change and poor Agricultural policies.
<h2><a href="https://zero.pindula.co.zw/">More Pindula News</a></h2>

"Zimbabwe Will Again Be The Breadbasket Of Africa" - AfDB President

The African Development Bank (AfDB) has injected a total US$25.65 million grant to enhance food production as well as mitigate against a possible food crisis in Zimbabwe, according to <a href="https://www.newzimbabwe.com/afdb-injects-us2565-million-to-support-zim-food-production/">NewZimbabwe.com</a>.
The funds were drawn from the African Development Fund’s Transition Support Facility, a concessional arm of the AfDB Group which granted the country an exemption from debt-related eligibility criteria, given the severity of its circumstances.
The development comes shortly after the AfDB president, Akinwumi Adesina committed to assisting Zimbabwe with a strategy to clear off its US$13.5 billion debt owed to external financiers.
Said Leila Mokaddem, AfDB’s Director General in southern Africa:
<blockquote>
This $25.65 million project aims to mitigate the food insecurity situation in Zimbabwe, which results from a poor agriculture season due to rainfall deficits and the impacts of the Russia/Ukraine conflict. The conflict has contributed to a sharp rise in commodity prices, including food and farm inputs, such as fertilizer and seed.
This project is in line with the Bank’s Zimbabwe strategy to support the private sector and agriculture productivity and sustainability as well as developing related value chains.
</blockquote>
Under the initiative, the African Emergency Food Production Facility will:
a). Distribute certified seeds and fertilizer to 180,000 beneficiaries, including around 70 000 women, in the eight farming provinces of Zimbabwe, namely Mashonaland Central, Mashonaland West, Mashonaland East, Manicaland, Masvingo, Matabeleland North, Matabeleland South and the Midlands.
b). Make use of ICT-based platforms and the existing private sector-based distribution channels.
c). Deliver farming inputs to beneficiary farmers through innovative financing, using a transparent and accountable electronic platform. To improve efficiency and productivity, it will employ extension systems based on the AfDB’s Technologies for African Agricultural Transformation initiative (TAAT) which has boosted agricultural output in several countries.
A fortnight ago, the World Food Program added Zimbabwe to the list of countries with hunger hotspots following a bad agricultural season due to poor rains received last year.
<h2><a href="https://news.pindula.co.zw/">Pindula News</a></h2>

AfDB Injects US$25 Million To Enhance Food Production In Zimbabwe

Bulawayo City Council has approached the Africa Development Bank (AFDB) for a US$10 million loan to rehabilitate its sewer and water systems.
This was revealed by town clerk Christopher Dube on Thursday during a media briefing. <a href="https://www.newsday.co.zw/2022/07/byo-applies-for-us10m-loan/">NewsDay Zimbabwe’s Patricia Sibanda</a> quotes him as saying:
<blockquote>
The amount which was supposed to be given to us by the AFDB as a grant was supposed to be US$34 million and US$4 million was supposed to be a contribution either from the government or ourselves as council.
There was certain work to be done, but those works were not done because there were some variations as a result of COVID lockdowns. For instance, in terms of the water and sewer mains renewals, we were supposed to do a lot. I am not quite sure about the statistics, but maybe it was about 47km and we did quite less than that.
Then it is this difference, this variance which we applied to government and AFDB to say can you make the money available to do the works that were not done because of variations and we applied for US$10 million, but if we were to be given any excess above that it will be a welcome development.
</blockquote>
Bulawayo has had water challenges for many years and the situation has been worsening over the years. 
<h2><a href="https://news.pindula.co.zw/">Pindula News</a></h2>

Bulawayo City Council Approaches AfDB Seeking US$10m Loan

OLD Mutual Zimbabwe’s banking subsidiary, <a href="https://www.pindula.co.zw/CABS">CABS</a>, formerly Central African Building Society has secured a US$7.5 million trade guarantee facility from the African Development Bank Group (AfDB). 
A bank guarantee is a promise from a lending institution that ensures the bank will step up if a debtor can’t cover a debt.
This is one of the first approval for AfDB under its new transaction guarantee instrument which was formally launched in July 2021.
The three-year-long facility will provide guarantees of up to 100 per cent to international confirming banks against the non-payment risk arising from the confirmation of letters of credit and similar trade finance instruments originated by the CABS on behalf of its clients.

<ul>
<li class="entry-title"><a href="https://news.pindula.co.zw/2021/04/28/cabs-receives-historic-e15m-credit-facility-from-european-investment-bank/">CABS Receives Historic €15M Credit Facility From The European Investment Bank</a></li>
</ul>
In a statement, AfDB said the ultimate beneficiaries will be small and medium-sized enterprises and local firms, who rely on the building society to meet their trade finance needs. Read part of the statement:
<blockquote>
Over the next three years, the facility is expected to support more than US$50 million in trade between Zimbabwe and the rest of the world. Lack of adequate credit lines from international confirming banks has restricted the building society’s ability to support its clients’ growth.
</blockquote>
AfDB said the facility will support the importation of critical inputs such as agro-chemicals, pesticides, farm machinery and other intermediate goods that Zimbabwe needs to revive its agricultural and manufacturing sectors.
The facility marks the AfDB’s third non-sovereign intervention in Zimbabwe in recent years and the second to CABS.
In 2017, CABS received a US$25 million trade finance line of credit, which was accessed by its various clients operating in, among other sectors, agricultural value chain out-grower schemes with smallholder producers of macadamia nuts, and cotton, beef and dairy production.
The AfDB Group currently supports 15 initiatives in Zimbabwe valued at US$176 million. These include the rehabilitation of infrastructure in the energy, water and sanitation sectors, financed through resources from the ZimFund.
The statement said that the Bank also supports initiatives to improve governance and public finance management in the public sector.
Financial inflows into Zimbabwe dwindled at the turn of the millennium when the southern African country’s relations with Western countries and international financial institutions went south. 
More: <a href="https://www.sundaynews.co.zw/cabs-secures-us7-5-million-trade-guarantee-facility-from-afdb/">The Sunday News</a>

CABS Secures US$7.5 Million Trade Guarantee From AfDB

<div class="entry-content" id="article-content">
Coca-Cola, a multinational beverages company has donated US$50 000 to Bulawayo for the implementation of a water and sanitation project.
The donation was made through Coca-Cola Company’s philanthropic arm, Coca-Cola Foundation, which awarded the money to DanChurchAid Zimbabwe Coca-Cola to implement the project.
The project is premised at addressing the recurrent water shortages issue that has perennially affected the second-largest city on Zimbabwe.
Speaking during the cheque handover ceremony at DanChurchAid offices in Harare, the company’s country director Mr Milidzani Ncube said:
<blockquote>The funding will be used to conduct site surveys, drill six boreholes and equip the solar driven water kiosks that will provide water to families in Bulawayo.
The Coca-Cola Foundation, The Coca-Cola Company and its bottling partners Schweppes and Delta are proud to be responding to this water crisis that will enable more than 25 000 people to access much needed safe and clean water daily.
Lack of access to safe water and sanitation services has direct health implications.</blockquote>
The six-months-long project is scheduled for completion by June 2021 and will be the second within a year after Schweppes Zimbabwe provided 2 181 families with clean water in Bulawayo as part of their Covid-19 humanitarian support.
</div>
<div id="article-footer-social-share">
Schweppes Zimbabwe is a manufacturer and distributor of non-carbonated still beverages under licence from The Coca-Cola Company in partnership with DanChurchAid Zimbabwe.
Last year, Bulawayo was distributing water on a rationed basis, a situation that saw poor communities in Cowdray Park, an informal settlement in the Bulawayo District, walking more than a kilometre to get water.
It is strongly believed that the African Development Bank (AfDB)-funded Bulawayo Water and Sanitation Services Improvement Project (BWSSIP) will have a significant impact on addressing water challenges in Bulawayo.
More: <a href="https://www.chronicle.co.zw/just-in-coca-cola-injects-us50-thousand-for-bulawayo-water-project/" rel="noopener" target="_blank">Chronicle</a>
</div>

African Development Bank (AfDB) Latest News

Latest Jobs