Harare – The African Export-Import Bank (Afreximbank) stands ready to provide all necessary support to aid Zimbabwe in tackling its fuel shortage.
This was said by the president and chairman of the bank’s board of Directors Dr. Benedict Okey Oramah to the media on the sidelines of the 32nd African Union summit on Sunday.
“We have to operate within the country limits they have. We are always available to support them as much as we can within our capacities,” he said.
“The fuel shortages I think are going to be resolved because the government has done some adjustments in prices, policy adjustments, that will make sure that fuel is available.”
Dr Oramah said the bank would support Zimbabwe with various instruments.
“We continue to support them on a revolving basis through letters of credit, provide financing for exports from Zimbabwe, we also provide some financing for investments for Zimbabwe,” Oramah added.
The fuel crisis in the country started at the beginning of September 2018 and ended briefly at the end of October 2018, after the government negotiated fuel supply agreements with Sakunda (part of the Tafigura Zimbabwe operations), Engen Zimbabwe and Total Zimbabwe. However, less than a month after the government intervention fuel shortages resumed, persisted through the festive season and became acute in January 2019.
On 12 January 2019, President Emmerson Mnangagwa announced fuel price increases from $1.34 per liter to $3.31 for Blended Petrol. Diesel increased from about $1.20 to $3.11 per liter.
In Zimbabwe fuel is distributed mainly through the National Oil Infrastructure Company of Zimbabwe parastatal.
One of the major causes of the fuel crisis is that the country is currently experiencing shortage in foreign currency and was therefore not able to procure enough quantities to satisfy demand. Fuel stations were required to sell fuel in Bond Notes but these bond notes were not easily convertible to forex by the banks. Banks, therefore, had to wait for forex allocations from the government.
On the other hand, the RBZ blamed the spike in demand for fuel to the growing vehicle population in the country which it said had jumped 50 percent to 1.8 million from 2017.
Meanwhile, Oramah added that the bank planned to disperse about 85 billion U.S. dollars in support of intra-African trade until 2021, a move he says is crucial to achieving African economic integration.
The Afreximbank president also said the bank is working with the AU to provide a state-of-the-art trade information web portal that will complement existing business initiatives by providing up-to-date economic information.
Afreximbank is a leading Pan-African multilateral financial institution devoted to financing and promoting intra- and extra-African trade.
The Cairo-headquartered bank has provided credit facilities totalling some 35 billion U.S. dollars to African business firms since its inception in 1993.
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