• SABC shenanigans

    SA has already embarked on a slippery slope to autocracy, warns Terry Bell in Inside Labour.

  • Zim tastes people power

    Protests in Zimbabwe are forcing Mugabe to face anti-government sentiment, says Memory Mataranyika.

  • Platinum handshake

    Officials who try to do what's right risk far more than blessed wrongdoers, says Solly Moeng.

All data is delayed
See More

IDC to finance Zim firms

Mar 24 2011 08:25
I-Net Bridge
Johannesburg - The Industrial Development Corporation of South Africa (IDC) has signed a $30m (R208m) facility agreement with Agricultural Bank of Zimbabwe (AgriBank), the parties said on Thursday.

The deal was arranged by SA's Musa Capital and Zimbabwe's Neverseez Capital.

This was the first transaction of its kind since the signing of the Bilateral Investment Promotion and Protection Act (BIPPA) between South Africa and Zimbabwe in 2010, the statement said.

"BIPPA seeks to create favourable conditions for investment between South Africa and Zimbabwe; provide security of tenure to South African investments in Zimbabwe; and unlock opportunities for the Zimbabwean local industry to access lines of credit from South Africa.

"In that context, the IDC Agribank deal is a significant step towards easing for the Zimbabwean financial services sector the liquidity constraints resulting from years of hyper-inflation and will, overall, assist in boosting economic activity in Zimbabwe," the statement added.

AgriBank said it would use the six-year term facility from the IDC to on-lend to its blue chip and medium-sized clients, some of which were listed on the Zimbabwean Stock Exchange - with a focus on increasing their production capacity.

However, $20m of the facility was allocated to firms who operated in the agri-business, manufacturing, and mining sectors while $10m would be on-lent to the Industrial Development Corporation of Zimbabwe.

The loan was structured to ensure that a large portion of the funding would be used by Zimbabwean companies to purchase South African goods and services.

"The IDC facility will, therefore, also provide revenue opportunities to South African firms," the parties said.

"Because it will help to induce productive capacity in several key sectors, we see the IDC facility as a watershed transaction," said Zimbabwe's Finance Minister Tendai Biti.

"It will also signal that Zimbabwe truly is open for business and that South Africa continues to play a supportive role in Zimbabwe's economic recovery."

Agribank CEO Somkhosi Malaba agreed that the transaction was significant in addressing the disablement of the banking sector resulting from the past 10 years of the country's economic history.

Ufikile Khumalo, the IDC's divisional executive, resources sectors, said: "The financial services sector plays a critical role in any economy and, given the central role that Agribank has historically played inthe agricultural and industrial sectors, in enterprise development, and in job creation, (the) IDC views this investment with optimism in respect of accelerating the progress of the Zimbabwean economy."

idc  |  zimbabwe


Read Fin24’s Comments Policy

24.com publishes all comments posted on articles provided that they adhere to our Comments Policy. Should you wish to report a comment for editorial review, please do so by clicking the 'Report Comment' button to the right of each comment.

Comment on this story
Comments have been closed for this article.

Company Snapshot

We're talking about:


Saving can make a lot of things possible, but we all know how hard it is to save. This special Savings Issue will help you get focused.

Money Clinic

Money Clinic
Do you have a question about your finances? We'll get an expert opinion.
Click here...

Voting Booth

Sarb's decision to keep the repo rate unchanged is:

Previous results · Suggest a vote