Zimbabwe’s central bank governor Dr John Mangudya told parliamentarians this afternoon that the Government has securitized its 5-years gold export receivables to pay off US$1 billion loans from regional banks.
The loans were obtained last year from regional banks namely: Afreximbank, TDB, PTA Reinsurance Corporation, African Development Bank and the South Africa Minting Company.
“The security on the two loans (Afreximbank and TDB) are future export (gold) receivables for 5 years.
“What we are basically doing is that we are spreading our cash-flows because each day our requirements as Zimbabwe are not met by the foreign currency that we have got,” said Reserve Bank of Zimbabwe Dr Mangudya.
Gold is one of Zimbabwe’s key exports.
Official figures show that as at mid-2018 Zimbabwe’s gold exports generated just under US$1 billion dollars in foreign currency receipts in the first six months of this year, which was the highest level in a decade.
In 2018, the price of precious metals (including gold) were generally subdued, occasioned by weak safe haven demand and a generally stronger dollar owing to interest rate hikes by the Federal Reserve during the period under review.
Such a moderation in commodity prices calls for increased production in commodity dependent economies such as Zimbabwe, so as to compensate for possible revenue losses.
According to figures provided by global data aggregator, TradingEconomics.com, Zimbabwe’s main exports are tobacco (23 percent of total exports) and nickel (20 percent).
Other key exports include: diamonds, platinum, and ferrochrome. Zimbabwe main export partners are: South Africa, China, Congo and Botswana.
In terms of a breakdown of the external loans that the country got last year, Dr Mangudya said:
“At Afreximbank we have exposure of US$641 million, and at TDB its US$152 million. These are United States dollars and these are loans that are well-structured facilities. The current loans were contracted last year.
“All the external loans, if you add them together with the smaller ones, come to US$985 million.”
The balance of the loans were acquired from the Bank of Mozambique (US$25 million), PTA Reinsurance Corporation (US$9 million), the African Development Bank (US$15 million), South Africa Minting Company (US$1,9 million).