Stabilisation package can be a game-changer

HARARE – African Export-Import Bank (Afreximbank)’s announcement on Tuesday of a $1,5 billion economic stabilisation package for Zimbabwe can be a game changer for President Emmerson Mnangagwa’s new government.

Emmerson Mnangagwa

President Emmerson Mnangagwa

Afreximbank said they are to support the stabilisation of the Zimbabwean economy by providing currency liquidity to avoid bank queues. The injected funds will also go towards the revival of the productive sector to stimulate more exports.

Apart from the bail-out being a game changer for his government, the funds’ injection can also propel Mnangagwa’s political bid for the presidency in next year’s elections.

The issue of the bank queues has been one of the most pressing economic and social issues which if immediately addressed will be a plus for Mnangagwa and his ruling Zanu PF government .

Afreximbank would also be supporting nostro accounts of the different banks to ensure that those dealing in US dollars have access every time they needed them to pay for goods.

The funds will also provide investment guarantees for investors, to entice them come to Zimbabwe.

The good news also coming from Afreximbank is that the $600 million nostro stabilisation facility extended to Zimbabwe to meet its foreign currency requirements for productive foreign payments had been finalised.

While Zimbabweans have received the news with hopes of a quick economic turn over, we hope there will be no misuse of the stabilisation package as has happened in the past.

In the short term the economic stabilisation package will boost our ailing economy, but we also need to look at the long-term because Zimbabwe still needs to repay that money bank to Afreximbank.

There is need for serious accountability and transparency regarding the terms of the financial package and the country’s eventual liabilities because if we are not careful we could be mortgaging the future of the country to debt.

Also given the long-term implications of acquiring foreign financial support, such deals need to be subjected to rigorous democratic oversight by various supporting institutions.

The package can restore confidence in the economy and set a good foundation for attracting both domestic and foreign investment.

Afreximbank’s economic stabilisation package if used wisely can send positive signals to the rest of the world that Zimbabwe is now a harbour for business investment.