Zimbabwe is currently utilizing its earnings from platinum exports to repay a $400 million loan from the African Export-Import Bank (Afrexim), as reported by Bloomberg.
This strategy reflects the nation’s challenge in securing loans from global financiers, and it highlights its reliance on platinum as a key economic asset.
The government of Zimbabwe entered into a credit deal with Afrexim Bank in February, aiming to support its budget and finance trade-related infrastructure.
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The terms include a six-year maturity period, a 10.2% interest rate, and a 12.2% borrowing cost in case of default.
The Reserve Bank of Zimbabwe oversees the repayment process, with the government committed to settling the Afrexim loan using 35 percent of its export earnings.
Despite the terms, Zimbabwe considers the Afreximbank loan a significant success, given its limited access to external finance over the past two decades.
Zimbabwe’s financial landscape is marked by challenges, with a debt burden of $18 billion. Despite this, the nation remains ineligible for fresh credit loans from major multilateral lenders like the African Development Bank, World Bank, and International Monetary Fund.
The country faces sanctions from the African Development Bank and other multilateral financial organizations due to outstanding loan arrears totaling $2.6 billion, making it the only African nation subject to such restrictions.
