Zimbabwe military clarifies NSSA’s role in Afreximbank loan.
Africom wishes to state facts on the Africom Afreximbank loan of 15m after having noted that certain elements of the media continue to misrepresent the contents on the recently published Forensic Audit Report into the National Social Security Authority (NSSA).
It is indeed fact that Africom Holdings borrowed money from Afreximbank to finance the deployment of telecommunication infrastructure in line with the company’s objective of expanding its services beyond the Harare and Mains Corridors Coverage. Unfortunately, this was a short-term loan that fell due before revenues on the first phase was realised as technical challenges that came with switching on and interconnection of the Network with other operators took longer than the 36-month tenure of the funding. The project was suffocated resulting in the company’s inability to service the loan.
While it is true that at the time NSSA held a 4% stake in Africom Holdings, the pension fund also owned 47.7% of Africom Continental whose activities had also been impacted by the problems at its parent company. In turn, Fernhaven owned 41% of Africom Holdings and 19.3% of Africom Continental and these two shareholders, who had the most to lose in the event of the loan call outcome, came together and considered a number of options including the restructuring of the loan. In so doing, the two entities assisted Africom with the security required to extend the loan amortisation period by another 36 months thereby allowing the first phase of the network to be brought online.
When the shareholders met again to discuss NSSA’s role as part of the guarantors, the fund took on this responsibility with a view of their 47.7% holding in Africom Continental and agreed to be the next guarantor with the specific condition that Fernhaven provides a guarantee using the immovable property. As a result, a mortgage was registered in favour of NSSA.
Fortunately, when the loan fell due, the Reserve Bank had established the Zimbabwe Asset Management Corporation (Private) Limited (ZAMCO) as part of holistic measures to deal with the problem of rising non-performing loans (NPLs) in the banking sector. As Africom met the criteria for this facility, the shareholders prepared all of the required documentation with Fernhaven attaching one of its properties as part of the conditions. In so doing, NSSA was absolved of any exposure and did not part with the US$15.8 million as reported in some sections of the media. This is clearly outlined in the NSSA forensic report but has been wrongly interpreted.
Rather, NSSA and Fernhaven contributed equally towards ZAMCO’s USD606,279 establishment fee and the two entities were compensated with increased shareholding in Africom for having provided the needed security and saving the jobs of over 120 employees. AT NO POINT DID NSSA PAY THE USD15.8 MILLION AS REPORTED IN THE MEDIA. Rather, the fund’s financial loss on the transaction is limited to USD303,140.
Today, Africom is still committed to providing exceptional service to its clientele across Zimbabwe and the company is extending its digital footprint to more communities. We are thankful to all our clients and stakeholders who have supported and helped the company to grow to where it is today and sincerely look forward to nurturing and growing these relationships for our mutual benefit.