Global embargo frustrates Women’s Bank

“We are transforming lives,” Marikanda said in a presentation to the Women’s Executive Leadership Roundtable, a conference organised by CEO Africa Roundtable, which is underway in Kariba.

SHAME MAKOSHORI Zimbabwe Women’s Microfinance Bank, the Zimbabwean lender established to bolster the development of female-led enterprises, says its long-cherished ambition to make game-changing interventions have been frustrated by hard-hitting global sanctions on Zimbabwe.

Zimbabwe Women’s Microfinance Bank

Chief executive officer Mandas Marikanda said yesterday demand for loans to female-led companies was robust, with four million potential recipients currently financially excluded.

But to rise to the challenge the state-funded bank must combine lifelines from government support and injections from international markets that have been driving female businesses across regions.

Marikanda said Women’s Bank had been reaching the dead-end each time it locates funding opportunities and submits proposals.

She said once potential funders discovered Women’s Bank’s origins, doors had been slammed shut in its face.

“We are transforming lives,” Marikanda said in a presentation to the Women’s Executive Leadership Roundtable, a conference organised by CEO Africa Roundtable, which is underway in Kariba.

“We have four million people who are outside banks who want to be assisted. Many of you think sanctions don’t work, but they work. Women’s banks everywhere get money. But (for us) they (potential funders) acknowledge that this is a good proposal but you are from Zimbabwe, go across into Zambia and we will fund you,” Marikanda told the conference.

There have been deep divisions on whether the southern African country’s ongoing economic turmoil has been precipitated by international sanctions.

But in the past few years, Southern African Development Community leaders have taken turns to denounce the hard-hitting sanctions, which big Western powers say have been designed to hit Harare’s political elites for alleged transgressions spanning from corruption to deadly human rights abuses and electoral theft.

In 2013, the ruling Zanu PF party estimated that the embargo had cost Zimbabwe a staggering US$42 billion in 13 years.

The figure has since been upgraded to over US$100 billion, but there has been no sign both sides were ready to come to the table to strike an agreement.

In 2019, Standard Chartered plc was fined US$18 million by the United States of America government for violating American sanctions. CBZ was also slapped with a US$385 million fine in 2017.

In the past few weeks, hyperinflation, which hit 500 billion per cent before a currency collapse in 2008, has returned to haunt Zimbabwe.

The Zimbabwe National Statistics Agency (Zimstat) said the annual rate hit 131% in May, from 96% the previous month, although some estimates placed the figure at well over 250%.

Along with hyperinflation and foreign currency shortages, Zimbabwe’s currency has been extensively battered on a stubborn black market, losing more than 30% of its January value by now, while basic commodity shortages have returned, pushing millions of people to the brink.

In recent analyses of the domestic situation, several global lenders have warned that Zimbabwe banks were frail, while organisations like the Chamber of Mines of Zimbabwe have said the extent of their capital requirements could not be bankrolled locally.

In her presentation, Marikanda said she was swinging across Zimbabwe’s polarised political terrain to fund female-led projects.

She said the flexibility of the system that she and her team had set up had seen even black-listed projects accessing crucial capital.

Addressing the conference through a representative, Industry and Commerce minister Sekai Nzenza said a string of domesticated value chains being pursued by the government might end up helping Zimbabwe fight “vicious cycles of price increases”, while unlocking growth opportunities for local firms.

Industry and Commerce minister Sekai Nzenza

The plan has been in place for several years, but it became a crucial part of Zimbabwe’s battle to stem economic decline since bloody confrontations exploded between Russia and Ukraine in February, sparking off shortages in a cluster of crucial commodities including wheat and oil.

Zimbabwe was already battling to forestall multiple turbulences when the war broke out, including rocketing inflation, forex shortages and an exchange rate crisis.

And in the past few weeks, the crisis has deepened, with currency battering escalating as confidence wanes across markets, forcing authorities to implement a sea of ill-timed ad hoc policies.

Nzenza, whose speech was delivered to female executives at the start of the Women Executive Leadership Roundtable here, said among value chains to drive her plan to wage a war on prices were the wheat-to-bread, cement, bus and truck and the sugar value chains.

She said by domesticating these, impetus to rebuild fragile markets would gain traction.

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