The African Export-Import Bank (Afreximbank) has approved $70 million (around R1.046 billion) to finance the expansion and upgrade of the Beitbridge border post in Zimbabwe to boost intra-Africa trade.
The Beitbridge border post between Zimbabwe and South Africa is the busiest border crossing in Southern Africa, with an average of 25 000 people and 500 trucks crossing the border a day.
The border’s upgrade is earmarked to significantly reduce waiting periods that have hampered and slowed trade across Southern Africa, causing haulage operators to use longer, less efficient alternative routes.
Afreximbank on Wednesday authorised a $43m senior term loan facility to Zimborders Mauritius Ltd and the issuance of an Investment Guarantee of $27m supporting Pembani Remgro Infrastructure Fund to join other investors in Zimborders Mauritius Ltd.
The bank's financing facility forms part of a $204.4m (approximately R3.2 billion) syndicated senior term loan facility for which Afreximbank was among a consortium of financial institutions acting as mandated lead arrangers and senior debt lenders.
Afreximbank president Prof. Benedict Oramah said the improvement of the Beitbridge border post was critical to reducing costs associated with traffic delays.
Current estimates by TradeMark Southern Africa (TMSA) indicate that a truck takes about five days to be cleared at the border post, creating additional “dead-weight” transport costs for importers.
Oramah said the upgrade will in turn also increase trade in the Southern Africa region in furtherance of Afreximbank’s drive to boost intra African trade.
“It is too costly to wait for almost five days at the border to deliver goods and services across Southern Africa,” Oramah said.
“With this facility, we aim to cut indirect and direct costs of trade associated with border post effectiveness and efficiency.”
The Beitbridge border post upgrade project, which is a public-private partnership, is funded by African financial institutions that have come together to provide commitments in the syndicated senior term loan facility.
The upgrade will include the procurement of technical equipment and software, thus modernizing the border post to ensure smooth service during the concession period.
In addition, Afreximbank said investments will be made in Beitbridge town, including developing a fire station, residential building units, housing sewer lines, housing electrical supply lines, a reservoir, water pipelines, a wastewater treatment plant, a water pump station and other infrastructure.