KZN’s agreement with AfreximBank could yield R20bn investment

The MOU between the KZN government and AfreximBank will enable the province’s state-owned enterprises to increase capacity and venture out into the rest of Africa, Premier Sihle Zikalala says.

DURBAN, May 27 (ANA) – A R20-billion investment hangs in the balance for the province of KwaZulu-Natal as it awaits the finalisation of an agreement signed on Thursday with the African Export-Import Bank (AfreximBank), according to a government report.

The memorandum of understanding (MOU) between the KZN government and AfreximBank will enable the province’s state-owned enterprises to increase their capacity and venture out into the rest of Africa, Premier Sihle Zikalala said on Thursday at the signing in Durban.

Zikalala said that the agreement will give the province a much-needed push to get out of the financial slump caused by the Covid-19 pandemic.

The South African economy shrank by 7% during 2020, as compared to growth of 0.2% the year before, according to the province’s MEC for Economic Development, Tourism and Environmental Affairs Ravi Pillay.

Unemployment also rose to 30.8%, as around 2.2 million jobs were lost during the hard lockdown levels in the second quarter of the year.

AfreximBank is a pan-African finance institution with its headquarters in Cairo, Egypt. The bank got a rating of Baa1 and BBB from Moody’s and Fitch, respectively.

President and chairperson of the board of directors at AfreximBank Professor Benedict Oramah was also present at the signing of the agreement at the Archie Gumede Centre.

Zikalala said that the bank will work with the province’s key developments such as the Dube TradePort, Richards Bay Industrial Park and the Port of Durban.

“The bank will become an important financial services partner for eligible public and private sector trade, and trade enabling infrastructure transactions in the province. We currently have a pipeline of projects worth over R20 billion (about US$1.45 billion) that are ready for financing by the bank. These are projects that are driven by both the state and the private sector,” Zikalala said.

The agreement states that AfreximBank will consider supporting events such as the KZN Export Week or similar events hosted by KZN.

“As KwaZulu-Natal, we are determined not to be spectators with the immense economic and developmental opportunities that Africa and the world are realising through the African Continental Free Trade Area (AfCTA), and our partnership with Afrexim will only serve to strengthen our case.

“We want to move Africa from the description which says that Africa is rich, but its people are poor,” the premier said.

– African News Agency (ANA); Editing by Yaron Blecher