Zimbabwe to get share of US$300m Afreximbank dividend

The Zimbabwean government is set to receive a significant payout from Afreximbank's recently declared US$300 million dividend, following the bank's exceptional financial performance in the year ending December 31, 2024.

Afreximbank reported a record profit of US$973.53 million for the financial year, marking a significant increase from US$756.1 million in 2023. This rise in profit was largely driven by strong growth in the bank's net interest income, which rose by 25.4% to US$1.81 billion, and its net fee and commission income, which surged by 32.45% to US$172.87 million.

The bank's performance in 2024 highlights its success in a challenging financial environment, with total interest income reaching US$3.1 billion-an increase of 23% from the previous year. The growth in interest income was attributed to higher market interest rates and a larger average volume of interest-earning assets.

Zimbabwe, as of 2023, holds a 5.71% stake in Afreximbank, making it the fifth-largest shareholder. As a result, the government will benefit from the dividend payout, which represents 31% of the bank's profit. This payout marks an increase from the previous year's dividend of US$264.6 million, demonstrating the bank's solid financial health and commitment to rewarding its shareholders.

The dividend payout follows the approval of the board of directors, which considered various factors, including the bank's business needs, inflation, capital adequacy, and the necessity of retaining earnings to support ongoing business expansion. The payout ratio for 2024 stands at 31%, slightly lower than the 35% recorded in 2023.

In addition to the regular dividend, Afreximbank also declared a special dividend of US$50 million for its concessionary financing window, in line with a resolution passed at the 2023 annual general meeting. This dividend aims to support the bank's efforts to provide affordable financing to African businesses, fostering economic growth across the continent.

The bank's capital position continues to strengthen, with a notable increase in the carrying value of property and equipment, which rose by 33% to US$436.4 million. This increase was largely driven by the accelerated construction of the Afreximbank African Trade Centre facilities in Abuja, Nigeria, and Harare, Zimbabwe-key infrastructure projects aimed at enhancing the bank's operational capacity and supporting trade across Africa.

In a further move to support growth, Afreximbank announced that its shareholders will have the option to acquire additional ordinary shares of the bank as part of the General Capital Increase II (GCI-II) initiative, which seeks to raise capital for the bank's continued expansion.

Afreximbank's strong financial results and continued investment in infrastructure are expected to support Zimbabwe's growth prospects, with the government benefiting directly from the bank's success. As one of the bank's key stakeholders, Zimbabwe is positioned to receive a substantial dividend payout, reinforcing the country's ongoing engagement with Afreximbank's initiatives to foster trade and development across Africa.