Ecobank bails out Zimbabwe

Ecobank bails out Zimbabwe
Published: 22 June 2018
AN African financial services institution Ecobank Transnational Incorporation says it is playing a crucial role to stave off fuel and cooking oil shortages in Zimbabwe.

The southern African country is currently experiencing intermittent fuel shortages due to rising oil prices on the world market and structural challenges in the economy that have spawned foreign currency shortages.

Statistics from the Reserve Bank of Zimbabwe (RBZ) show that the country uses close to $80 million to import fuel per month, and this has prompted the deep-pocketed Ecobank to unveil funds for fuel procurement.

"As of 2018, the bank is funding almost 100 percent of the raw materials used in the manufacture of cooking oil and 80 percent of fuel imports, which is not only a testament of our capacity, but of our commitment to our country and the businesses that ply their trade in it," Ecobank Zimbabwe chairman Fortune Chisango said on Tuesday.

Zimbabwe consumes more than 1,2 billion litres of fuel annually, with most of the fossil energy being used in the transport, mining, manufacturing and agriculture sectors. There are about 1,8 million cars in Zimbabwe powered by diesel and petrol.

At peak around 2014/15, the economy had the capacity to consume three million litres of diesel and two million litres of petrol per day. This translated to over one billion litres of diesel and 730 million litres of petrol.

Chisango noted that Ecobank, which has rolled out over $150 million worth of letters of credit lines into the Zimbabwean market with the help of its international partners, was committed to see the economy grow.

"To evidence this commitment even further, we are planning to roll out an additional $45 million into the Zimbabwean market to fund the import of critical implements for our businesses," he added.

Central bank governor John Mangudya last month conceded that the country was facing structural challenges that include low lines of credit, a huge debt overhang, disruptions in the supply of ethanol due to seasonal changes and rising oil prices on the world market.

Prices of oil have gone up from around $47 a barrel in June last year to $65 as of yesterday.

"We do believe that the country is facing challenges which have to do with supply and demand of foreign currency. The low supply of foreign currency is due to the pressures this economy is going through. We believe that the policy thrust we are pursuing, which is geared towards stabilising the economy, is the best strategy to restore the economy. We believe that the economy needs an export-oriented base. We need to create more exports, create more foreign currency," said Mangudya.
- fingaz
Tags: EcoBank,


Latest News

Latest Published Reports

Latest jobs