This archive report was first published on 2 July 2020.
On July 2, 2020, Zimbabwe's economic woes deepened as the country secured a $250 million credit facility from the African Export-Import Bank (Afreximbank). The loan aims to alleviate the country's economic crisis, which has been exacerbated by a severe shortage of fuel and essential goods.
The loan, which is a significant lifeline for the struggling nation, will see $150 million allocated towards purchasing fuel, while the remaining $100 million will be used to fund essential services. This move comes as Zimbabwe grapples with a severe economic crisis, marked by a 786% inflation rate and a weakening Zimbabwean dollar.
According to reports, fuel prices have risen by 152% in the past week, while the cost of cornmeal has jumped by 30%. The dire economic situation has left the country in a state of poverty, with 7.7 million people requiring food assistance, as per the United Nations aid agencies.
Notably, Zimbabwe's inability to access loans from multilateral lenders like the International Monetary Fund (IMF) has forced the country to rely on alternative funding sources. In the past, the country has secured Afreximbank funding using minerals as collateral.
As the country continues to grapple with its economic woes, the government has implemented measures to stabilize the currency, including banning mobile money transactions and trading on the stock exchange. The African Development Bank (AfDB) has previously warned that the economy can only turn around if necessary monetary reforms are implemented.
