daniel chigunwe
Nqobile Bhebhe
There is growing consensus for Zimbabwe to urgently explore and tap into internal non-traditional sources of funding, leverage on private capital and create new partnerships between Government, the private sector and civil society for sustainable development.
Proponents of internal funding are of the view that sustainable socio-economic development requires solutions that are developed domestically, hence the country needs to intensify efforts in mobilising resources within, especially in the face of limited access to international capital.
Exploring domestic financing alternative avenues dominated the three-day second edition of the Zimbabwe Economic Development Conference (Zedcon) in Victoria Falls this week.
The conference was held under the theme, “Public and Private Resource Mobilisation for Sustainable Development.”
Deliberations at the three-day summit ranged from sources of climate financing, de-dollarisation strategies, monetary policy transition, leveraging digital finance for financial inclusion, leveraging financial markets infrastructure and manufacturing sector prospects.
The conference drew participants from the Government, representatives from local and international investors, business leaders, bilateral and multilateral development institutions, academic and research bodies, and bankers, among others.
Officially opening the conference, President Mnangagwa stressed the need for locals to harness domestic resources to build the country and assured stakeholders that Zimbabwe is still open for business.
“The theme for this year’s conference: ‘Public and Private Resource Mobilisation for Sustainable Development’, underscores the need for all of us to explore and expand avenues for accessing resources for sustainable socio-economic development,” he said.
“As a country under sanctions, we must not bury our heads in the sand but must grow the economy faster than those countries not under sanctions.
“This further calls on us to generate and indeed accelerate growth through the utilisation of our vast human and natural resource endowments,” said the President.
“We must meet this obligation in spite of the fact that our country remains under the yoke of illegal sanctions. Our philosophy, that says ‘Nyika inovakwa, inotongwa, inonamatigwa nevene vayo/Ilizwe lakhiwa, libuswe, likhulekelwe ngabanikazi balo’, should embolden us in all respective sectors.”
Deputy Finance, Economic Development and Investment Promotion Minister, David Kudakwashe Mnangagwa also emphasised that sustainable socio-economic development requires solutions that are developed domestically.
To that end, he said the county needs to intensify efforts in mobilising resources locally taking into account that external financing is limited and in some cases has dried up.
In this regard, President Mnangagwa said up-scaling domestic resource mobilisation initiatives will be critical in order to adequately fund National Development Strategy 1 (NDS1) programmes and projects during the second half of the Strategy period.
“The theme for this conference reflects the urgent need to find new and innovative ways to mobilise public and private resources for sustainable economic development. As a country, we need to explore new financing models, leverage private capital and create new partnerships between governments, the private sector and civil society.”
Giving key takeaways from the conference, Finance, Economic Development and Investment Promotion permanent secretary, George Guvamatanga, said riding on the conference theme, “Public and Private Resource Mobilisation for Sustainable Development,” there was general consensus from delegates on the need to explore domestic alternative ways of financing beyond the existing revenue streams at a time when the country is under sanctions and highly indebted.
“In view of this, researchers made several recommendations including that the Government should develop comprehensive climate legislative frameworks which will enable the country to tap into global climate financing sources such as green bonds and carbon credit.
“This should be complemented by the development of the market for issuance of green bonds underpinned by a conducive macroeconomic environment.
“The Government was urged to extensively explore public-private partnerships (PPPs) as a form of financing.
“One of the necessary conditions for their success was identified as an investment in project preparatory activities such as feasibility studies in order to ensure bankability, added Guvamatanga.
Presenting a paper on “Exploring Emerging and Innovative Sources of Climate Financing for Zimbabwe,” Tinashe Charles Mashavave said issuance of green bonds and effective regulation of carbon trading in Zimbabwe can provide a mechanism to attract financial resources and promote sustainable development while mitigating the effects of climate change. On recommendations, he said there is a need to develop local capacities of stakeholders to handle the technical complexities involved in the design, verification, certification and reporting standards for green projects;
“The Government may consider fiscal incentives for investors and cover the cost of third-party verification for issuers to expedite the green bond market; Given that the legal framework for carbon trading has been promulgated in Zimbabwe, there is a need to promote, build capacity and raise awareness on carbon credit trading.”
Mashavave added that the country can utilise carbon credits to access the necessary funds to implement climate change adaptation and mitigation projects such as building resilience and achieving sustainable infrastructure.
He said close regulation of carbon trading is critical to prevent greenwashing and ensure that the benefits of carbon credits flow to local communities.
In a paper on “Towards the development of a thriving National Voluntary Carbon Market in Zimbabwe,” Independent Researcher Joyce Chuma noted that resource mobilisation and financing of NDS1 is high-priority adding that climate change is one of the major threats to the attainment of Zimbabwe’s Vision 2030 as it continues to work its way into limiting economic activity adding that there is an urgent need to tap into non-traditional sources.
The role of private sector capital in climate finance is gaining support both in theory and practice.
But which sources of private sector capital are practical and in alignment with Zimbabwe’s reality?, asked Chuma.
“Increasing policy signals point towards the role of carbon markets. In principle, the Voluntary Carbon Market (VCM) offers opportunities to enhance Zimbabwe’s access to a private sector capital for the attainment of Vision 2030 and some of the SDGs, including improved climate action.
The outcome of ZEDCON 2023 is expected to provide evidence-based policy advice which will contribute to the formulation of the 2024 National Budget and review of the National Development Strategy (NDS1), which spans 2021 to 2025 and is anchored on devolution, decentralisation and prudent use of national resources for the benefit of all citizens.
Bongani Ndlovu