Zimbabwe is in the process of repaying a $400 million loan from the African Export-Import Bank, utilizing proceeds from its platinum exports. The country, burdened by an $18 billion debt, is resorting to leveraging its mineral wealth to secure credit, highlighting the challenges it faces in obtaining loans from international financiers.
According to a report by Bloomberg, the repayment strategy involves earmarking 35% of export proceeds from Zimplats, a platinum mining unit of Johannesburg-based Impala Platinum. The Reserve Bank of Zimbabwe (RBZ) manages these funds to fulfill the repayment obligations to Afreximbank.
Zimbabwe’s debt situation currently renders it ineligible for new credit lines from multilateral lenders such as the World Bank, International Monetary Fund (IMF), and the African Development Bank. The $400 million loan agreement with Afreximbank, signed in February, is intended for budget support and trade-related infrastructure financing. The loan comes with a 10.2% interest rate over a six-year term, with the possibility of escalating to 12.2% in case of default.

Zimbabwe’s Treasury views the Afreximbank loan as a notable success, particularly considering the nation’s exclusion from international lenders for over two decades. The limited access to external finance, especially for budget support, has been a defining feature of Zimbabwe’s financial landscape.
Despite being rich in mineral resources such as gold and diamonds, Zimbabwe has faced economic challenges, prompting recent initiatives. The introduction of a new levy on lithium and a wealth tax aims to generate additional revenue for increased spending to bolster the economy. This move is crucial amid an 89% depreciation of the Zimbabwean dollar against the US currency and an annual inflation rate exceeding 176%.
Under the leadership of AfDB President Akinwumi Adesina, Zimbabwe has been actively engaged in debt clearance talks. These discussions are set to resume next month after a temporary pause to accommodate elections in August.
In conclusion, Zimbabwe’s utilization of platinum exports to settle its Afreximbank loan underscores the complexities it encounters in securing international financing. The success of the loan agreement is seen as a significant milestone, but the nation’s broader economic challenges persist, necessitating innovative measures and ongoing discussions to address its debt situation and promote sustainable economic growth.
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