Country in urgent Need of Funding

Zimbabwe requires a whopping US$ 27bn – more than twice the size of its current economy – to fund a not even ambitious five-year plan to improve basic services and rebuild the impoverished country. President Robert Mugabe’s government wants to invest in food security, social services and infrastructure, to reduce poverty and expand the economy an average of 7.1% a year by 2018. But the plan, known as ZimAsset, requires massive capital, in a country shunned by Western governments and funding institutions such as the World Bank, because Harare has already failed to repay billions of dollars of debt.

Zimbabwe forecasts an optimistic growth rate of 6.4% this year from 3.4% in 2013, but analysts say the economy has lost steam, hit by a dollar crunch, company closures and electricity shortages. “The quantum of the resources needed to fund ZimAsset is estimated at over US$ 27bn, with the bulk of it earmarked for energy, water, sanitation and social sectors,” Jonah Mushayi, the acting director for fiscal policy in the Ministry of Finance, told an industry meeting. Zimbabwe’s gross domestic product totalled only US$ 11.6bn in 2013, according to government statistics.

Mushayi said the government planned to issue diaspora bonds to tap the nearly 3 million Zimbabweans living abroad but gave no details. Remittances from the Zimbabweans living outside the country amounted to about US$ 1.8bn in 2013. Harare would also set up special economic zones, which would give tax incentives to foreign investors, and seek funding from the BRICS bloc of countries – Brazil, Russia, India, China and South Africa, Mushayi said.

ZimAsset, or the Zimbabwe Agenda for Sustainable Socio-Economic Transformation, was launched in October 2013 and is due to run until December 2018.

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