IN SHORT: Zimbabwe’s National Railways of Zimbabwe is finalising a $150 million short-term loan from Afreximbank to rehabilitate dilapidated railway infrastructure, refurbish locomotives and improve operational efficiency, according to testimony from the Mutapa Investment Fund at a parliamentary committee hearing in May 2026. NRZ, which falls under the Mutapa Investment Fund, currently hauls approximately 2 million tonnes of freight annually against an installed capacity of 18 million tonnes at its 1990s peak. MPs expressed concern that the latest rescue package could repeat the pattern of failed recapitalisation attempts of the past decade.
Zimbabwe’s National Railways of Zimbabwe, the state rail operator whose infrastructure has been degrading since the economic collapse of the late 1990s, is approaching the final stages of a $150 million Afreximbank loan agreement that would provide the first significant external financing for rail rehabilitation in years, according to testimony before Zimbabwe’s Parliament Public Accounts Committee. Enerst Denhere, Deputy Investment Officer at the Mutapa Investment Fund which oversees NRZ, told parliamentarians that the loan has been through multiple credit committees and is “almost there,” with the borrower seeking a grace period to allow infrastructure upgrades to generate the cash flows needed to begin repayments.
- The $150 million short-term facility is intended primarily for infrastructure rehabilitation. Approximately 80% of the loan proceeds are earmarked for upgrading rail track, signalling systems and associated infrastructure, with the remainder covering operational costs. NRZ’s track network covers 2,760 kilometres but is riddled with speed restrictions caused by degraded track, described by parliamentary committee members as equivalent to potholes on a road network.
- NRZ falls under the Mutapa Investment Fund, Zimbabwe’s sovereign wealth and state enterprise holding vehicle. Mutapa was created to manage Zimbabwe’s portfolio of state enterprises commercially rather than politically, and the NRZ rehabilitation is one of its most visible and challenging mandates. MIF Deputy Investment Officer Denhere told parliament that the Afreximbank engagement began approximately 18 months ago, reflecting the extended due diligence requirements for a state enterprise with no track record of commercial debt repayment.
- NRZ hauled approximately 14 million tonnes of freight annually at its 1990s peak. Current volumes are approximately 2 million tonnes, representing an 85% collapse in utilisation. The country has compensated partly by shifting bulk cargo to road haulage, with knock-on effects on road deterioration, logistics costs and accident rates involving heavy trucks.
- The $150 million is a short-term facility, not a long-term capital investment. The Mutapa Investment Fund has outlined a more ambitious $3 billion rail infrastructure programme for 2026 to 2030 that would rehabilitate 1,700 kilometres of track, procure 30 mainline locomotives and expand freight capacity to 6.7 million tonnes per year. The Afreximbank loan is the immediate bridge to operational viability, not the transformational programme itself.
- The Zimbabwe-Zambia $2.18 billion Lion’s Den to Kafue railway, signed in April 2026, creates a direct commercial demand pull for NRZ. A functional NRZ is a prerequisite for connecting Zimbabwean mineral exports to the new Kafue corridor and ultimately to Beira Port, the closest Indian Ocean outlet. Without operational NRZ capacity, the bilateral railway deal’s economic value cannot be realised. Africaspoint covered the Zimbabwe-Zambia rail deal: $2bn railway rewires Southern Africa.
The parliamentary scepticism at the PAC hearing is well founded. NRZ has been in various stages of recapitalisation discussion for the better part of two decades. A $400 million DIDG-Transnet deal announced in 2018 never reached financial close. Multiple smaller financing initiatives have followed similar trajectories. The Afreximbank engagement is different in one respect: it has gone through Afreximbank’s own credit committee process, which imposes external financial discipline that previous bilateral government-to-government discussions lacked. Whether that discipline is sufficient to overcome NRZ’s structural challenges, including legacy debt, operational losses and governance weaknesses, remains the central question.
The Bigger Picture: Zimbabwe’s rail collapse is a concrete economic cost that manifests in higher logistics bills for every business operating in the country, faster road deterioration, and reduced competitiveness for Zimbabwean mineral exports. At 2 million tonnes of freight annually against an 18 million tonne capacity, NRZ is running at 11% of what it should be doing. The $150 million loan will not restore the network to peak capacity, but if it actually reaches financial close and is deployed into track rehabilitation, it could restore enough operational capacity to handle the initial freight flows from Zimbabwe’s mineral export ban and the Zambia corridor deal. That makes the Afreximbank facility strategically significant beyond its modest size.
Source: NewZimbabwe.com, May 25 2026 / Southerton Business Times, May 2026
