By UK Bureau & Agencies
HARARE: Global brewing giant Anheuser-Busch Inbev will invest more than $120 million of its dividends and fees trapped in Zimbabwe in the central bank’s savings bonds.
The development was confirmed by AB Inbev’s Zimbabwe subsidiary Delta Corporation in a statement on Thursday.
“AB Inbev has agreed to place more than $120 million due to them in relation to unremitted dividends and fees into RBZ (Reserve Bank of Zimbabwe) savings bonds in order to reduce the pressure on the demand of foreign currency,” said Delta.
The bonds, which were introduced in September 2017, have a coupon of 7 percent and a tenure of between 12 and 60 months.
AB Inbev owns a 40 percent stake in Delta, the country’s largest brewer and soft drinks maker which has been struggling to repatriate dividends and import raw materials due to a severe shortage of dollars in the economy.
Zimbabwe has long struggled with foreign currency shortages due to depressed export productivity, poor foreign direct investment inflows and lack of international financial support.
The problem has worsened in recent months resulting in fuel shortages that have seen people spending hours in queues including overnight.
The central bank has been forced to prioritise and ration foreign currency supplies resulting in investors failing to their dividends out while local companies struggle to import raw materials.
Delta said last week said it would start selling its products in foreign currency to cope with the crippling shortage of U.S. dollars, but the company abandoned the plan under government pressure.
The forex crisis notwithstanding, AB Inbev remains committed to Zimbabwe.
“AB InBev remains a committed 40% shareholder in the Delta business,” Delta said in its statement.
“AB InBev has supported Delta through credit lines for the importation of raw materials since access to foreign currency became limited and continues to provide this support.”