The facility is aimed at improving access to import financing, regional markets and business supplies for small and medium-sized enterprises, while also strengthening support for women-led businesses and Zambia’s participation in global trade.
Economist Trevor Hambayi said the guarantee would support Access Bank Zambia, a private sector lender, in expanding trade finance to businesses that have struggled to secure funding.
Hambayi said previous guarantees had largely gone to public enterprises or through government-to-government and bilateral arrangements before being channelled into public banks. Hambayi said the latest arrangement marked a shift because the beneficiary bank is privately owned.
According to Hambayi, the private sector focus could bring practical benefits for sectors such as agriculture, manufacturing and cross-border trade. Hambayi said access to finance remained low in Zambia, with current access at 8.3%, compared with a level of around 20% that Hambayi said would be needed to make a broader economic impact.
Hambayi said climate pressures had also made business financing more difficult, particularly for agriculture, increasing the importance of additional trade finance support.
On Zambia’s wider financial position, Hambayi said the approval carried significance after the country’s 2020 sovereign default following a missed Eurobond payment. Hambayi said debt restructuring had improved Zambia’s classification and had started to support renewed access to external finance, although financing remained expensive.
Hambayi said the African Development Bank approval also pointed to rising investor confidence during a period in which international investors had been monitoring Zambia’s debt restructuring process. Hambayi said the facility could contribute to stronger inflows of external capital to support economic recovery.
Hambayi said the guarantee could also improve Zambia’s standing in global financial markets and help attract more capital into the country.
On implementation, Hambayi said African Development Bank processes would likely take a few months before funds became available, although Hambayi said the facility was expected to start entering the market within the year.
Hambayi also confirmed that Access Bank Zambia is part of the same Access Bank group operating in Nigeria, a structure that Hambayi said could offer added advantages for exporters and importers operating across African markets where the bank already has a presence.
–ChannelAfrica–
