IMF denies knowledge of Afreximbank loan
THE International Monetary Fund (IMF) has professed ignorance over the existence of a US$200 million facility from the African Export Import Bank (Afreximbank) which the Zimbabwean government claims will be used to back soon-to-be-introduced bond notes.
By Taurai Mangudhla
Government officials say the surrogate currency is meant to avert a biting cash crisis while promoting exports,as fears abound that the authorities are using bond notes as a ruse to re-introduce a fully-fledged local currency.
Asked whether or not the IMF knew anything about the fate of the US$200m facility which Zimbabwe has repeatedly announced it will get from Afreximbank to back the bond notes, IMF press officer Andrew Kanyegirire said he had no information on the subject.
“I don’t have any information on the Afreximbank loan either,” said Kanyegirire, according to a transcript of an October 8 IMF African department press briefing.
This comes amid fears Zimbabweans could have been hoodwinked by government to believe the existence of a US$200m facility to back the surrogate currency when in fact the authorities will just be printing money into circulation.
The Reserve Bank of Zimbabwe (RBZ) is preparing to launch bond notes amid questions over the legality of the surrogate currency and the lack of a term sheet for the US$200 million Afreximbank facility.
Government sources told the Zimbabwe Independent last week that there is no term sheet between the RBZ and Afreximbank on the US$200m facility backing the bond notes, raising eyebrows over the monetary issue.
“The term sheet of the US$200m is unknown to the public and that ordinarily raises a lot of questions on such a facility. The salient features such as the tenure and how the regional bank will benefit from this facility has largely been shrouded in secrecy,” a source said. “What role did parliament play in this? All these questions beg for answers, given the quantum involved.”
A term sheet serves as a template to develop more detailed legal documents. Once the parties involved reach an agreement on the details laid out in the term sheet, a binding agreement or contract that conforms to the term sheet details is then drawn up.
Afreximbank regional manager for Southern Africa, Gift Simwaka, last week declined to comment on the facility, referring questions to the RBZ.
Suspicion over the facility has been heightened by the fact the regional bank has not posted on its website anything to do with the US$200m export facility, raising more questions on its transparency. Tellingly, other loans extended to Zimbabwean institutions by the Cairo-based bank are openly listed.
Last week, Vice President Emmerson Mnangwanwa said Zimbabwe is finalising legal provisions to introduce the bond notes with a view to having a mode of transaction which the country can control. His remarks have stoked fears that the authorities will print more than the US$200 million, especially given pressing recurrent expenditure items that have seen 97% of the US$4 billion national budget being gobbled up by salaries, resulting in successive budget overruns.
Responding to another question on the current status of Zimbabwe’s negotiations with the IMF about the debt clearance programme, especially after meetings scheduled for September between the two parties were cancelled, Kanyegirire said: “In the case of Zimbabwe, there’s really not a significant change in terms of our engagement, the mission in September was delayed for some technical reasons, not having to do with the overall structure of the dialogue. So there is not much new information I can provide, and update you there”.
In May, the RBZ announced it would introduce bond notes as a 5% incentive to exporters. The apex bank said the incentive would be discontinued once exports reach the US$6 billion mark from US$1,125 billion for the six months to June.