NMB, NBC banks have offered a $200 million (approximately 470bn/-) syndicated loan tranche to the Government of Zanzibar that will be used to finance various socio-economic development projects in the Isle during the financial year 2023/2024.
Through this exclusive syndicate by the two local banks, NBC Bank assumed the role of Mandated Lead Arranger (MLA) and underwriter, while NMB Bank is a co-financer for the syndicated facility that will be paid back within an 8-year period.
The loan seeks to fund social services and infrastructure development initiatives that aim to enhance livelihoods, drive economic growth, and foster sustainable development to the Zanzibar community.
Speaking shortly after the signing of the syndicated loan agreements during a brief function held at State House in Zanzibar, the Chief Finance Officer Juma Kimori described the syndicated loan as a landmark achievement for the banking and finance industry in the country.
“We are honored to be part of this significant undertaking to support the Revolutionary Government of Zanzibar. Our participation in this arrangement underscores our deep commitment to support the development and well-being of the Zanzibar community,” Kimori said.
Kimori added, “We believe this loan, will help enhance social services and foster sustainable economic growth hence creating lasting benefits for the people of Zanzibar and contribute to their prosperous future.”
He during the event reiterated the bank’s commitment to continue working closely with the Revolutionary Government of Zanzibar adding that the bank apart from supporting various development projects has been instrumental in investing in Community Social Investments (CSIs) as part of its commitment to create a shared value for all its stakeholders including communities where the bank operates.
“As a bank, we are committed to fully support realization of Zanzibar Government’s Blue Economy Agenda through provision of seamless banking solutions,” he said.
Theobald Sabi, the NBC Managing Director, during the event expressed delight in bank’s participation in the syndicated loan echoing the same sentiments that it will be instrumental in achieving the Revolutionary Government of Zanzibar’s vision for inclusive growth and sustainable development.
Sabi added that the credit arrangement signifies a remarkable achievement towards the common objectives of community empowerment, inclusion, and enhancing the well-being of the people.
The Minister of State, Office of the President, Finance and Planning, Dr. Saada Mkuya during the event said the syndicated loan re-affirms the Zanzibar Government’s commitment to continue securing alternative local sources to fund Government’s development projects.
“We approached all the local financers in our quest to secure alternative sources of funds and we are glad that NMB and NBC banks showed interest. We are glad that today we are signing the syndicated loan agreements after almost six months of negotiations,” Dr. Mkuya said.
She noted that the secured loan will be spent in accordance with the rules and regulations for financial policy management.
The President of the Revolutionary Government of Zanzibar, Dr. Hussein Ally Mwinyi however expressed gratitude to the two banks for their crucial role in securing a successful credit line adding hinting that after successfully securing the syndicated loan facility, his Government plans to double development projects in the Isles this year as compared to last year.
“We have secured a $200 million loan tranche from our two local banks this year and this is the first of its kind in the history of Zanzibar. There is now reason for doubts on how we will re-pay the loan as we have already drawn strategies to ensure that the loan is paid within the stipulated time,” Dr. Mwinyi said.
President Mwinyi highlighted that the credit facility would usher in transformative improvements in social services and infrastructure, ultimately enhancing living standards, creating more employment opportunities, and fostering sustainable economic development, all in line with the government’s strategic vision.
“Our plan is to continue working around the clock to ensure that we finalise all the priority development projects that have been earmarked before the 2025 elections,” Dr. Mwinyi added.