adminPlans for the rescue operations are described in the party’s manifesto titled “Indigenise, Develop and Create Employment.” The targeted financial institutions are the Infrastructure Development Bank of Zimbabwe, Agribank and the Small Enterprises Development Corporation.
The revolutionary party intends to capacitate IDBZ to the tune of US$5 billion, Agribank US$2 billion and Sedco, a financing vehicle for small to medium-sized businesses, will be recapitalised to the tune of US$300 million.
Zanu-PF says the financial institutions are in an unhealthy state, a situation which was worsened by their inability to access lines of credit from international markets due to illegal sanctions imposed on Zimbabwe.
Agribank and IDBZ have since been removed from the US Office of Foreign Assets Control sanctions list
The party’s blueprint also notes the insolvent state of the institutions got worse during the life of the coalition Government when Treasury fell under the “treacherous” hands of a Minister of Finance “whose hostility to the development of Zimbabwe’s infrastructure, especially in the sector of agriculture, knew no bounds.”
“Zanu-PF is clear that the assets realised from the Indigenisation and Economic Empowerment Programme constitute a credible and viable source of capacitating of the country’s national development banks which has not been tapped,” says the party’s manifesto. Analysts say strengthening the country’s development financial institutions was an important element for the economy.
They also noted that many businesses, particularly small to medium-sized and farmers, have reported challenges in obtaining loans due to prohibitive interest rates and lack of collateral.
Zimbabwe needs about US$15 billion to revamp infrastructure, according to the African Development Bank and US$2 billion to finance farming annually.
“A lot needs to be done in the area of agriculture, small to medium enterprises and infrastructure and, therefore, Zanu-PF must really be applauded for their consideration in recapitalising these institutions so that they can effectively discharge their respective mandates,” said an economist with a local research firm.
SA-based economist Mr Gift Mugano said recapitalising development finance institutions would help financing infrastructure backlog which needs close to US$15 billion, retiring the national debt which is hovering around US$10,6 billion, budgetary support, provide concessionary loans to industry, address balance of payments problems, provide funding to the informal sector and critical social programmes.
Online Reporter