FINANCE Minister Patrick Chinamasa has appealed for technical support from the African Development Bank to build expertise on how the country can leverage its resources to raise foreign capital and access external lines of credit.Minister Chinamasa last week met AfDB officials in Harare, among them AfDB’s regional director Mr Ebrima Faal, to find ways in which the parties can increase co-operation to spur Zimbabwe’’s economic recovery and growth.
Top among the areas in which Zimbabwe needs assistance is technical expertise on how the country can mobilise its mineral resources to unlock external lines of credit and gain access to foreign capital.
“I have asked him to give us technical expertise to help us to mobilise domestic resources and use those domestic resources in securitisation to unlock capital to flow into the country,” he said.
Zimbabwe will, however, need to do extensive exploration and prospecting for full information on the stock of its mineral reserves.
The initiative stems from the understanding that Zimbabwe holds huge reserves of a diverse portfolio of mineral assets that lie unexploited yet it has battled to get capital to grow the economy.
“I believe that AfDB has expertise and I have asked that they look into it so that they can provide that expertise to us. If we have to use these resources for securitisation, we need to know the quantity,” the minister said.
“When we have quantified what we have it is easy to approach investors and say this is what we have, can we have US$5 billion to US$10 billion so that we can do ABC. AfDB has promised to look into that and assist,” Minister Chinamasa said.
The minister said the technical expertise required revolved around aspects of how that is done and how to look for the investors.
“This is a new concept where you are using something that is untapped, an asset that is still in underground. It’s a new concept so you need all the expertise required,” said the minister.
Zimbabwe requires huge amounts of funding for various aspects of the economy including replacing old equipment, raising industrial capacity utilisation, boosting agricultural output, increasing electricity and addressing infrastructure deficit.
While there are other challenges besetting the economy such as lack of raw material, shortage of electricity and high cost of utilities and employment costs, funding is the biggest constraint.
In that respect, Government has sought assistance from the AfDB in terms of increased funding support for agriculture, mining, tourism and industry to jolt economic recovery and growth.
The bank’s regional director said AfDB was an African bank committed to assisting its members to mitigate funding constraints.
“The bank is Africa’s bank. It is a bank that is owned by the 54 countries on the continent. We know the continent well and therefore we are a trusted partner.
Irrespective of difficulties that our membership are going through, we have engaged, that is what we have done in Zimbabwe over the last few years.
“We want to try to assist in the process of re-engagement within the international community, which is a mandate that Sadc gave to us, which we are trying to fulfil,” said Mr Faal.
He said AfDB does not extend direct funding to members in arrears, but in the case of Zimbabwe would not wait until the arrears have been cleared.
“We have discussed amicably and I think that from our side the understanding is that we are honoured to be the partner of choice to move the process forward together with other partners for smarter partnerships going forward,” said Mr Faal.