SA mall investor to assess bond notes impact

Source: SA mall investor to assess bond notes impact | The Herald July 25, 2016

Business Reporter
Augur Investments’ planned $100 million shopping mall in Harare north will only take off after the South African investor assesses the economic impact of bond notes. This comes after the Environmental Management Authority recently gave Augur Investments the green light to proceed to build the shopping mall in Harare’s Borrowdale suburb. There had been concerns that part of the area on which the mall will be built is a wetland, but there now seems to be consensus among all parties that adequate precaution has been taken to preserve the environment.

Augur investments chairman Ken Sharpe said last Friday while EMA had given the all clear for the project to proceed; after recommendation from Government, the developer now wants to assess the economic impact of bond notes.

The Reserve Bank of Zimbabwe has indicated that bond notes, which are an export incentive and part of measures monetary authorities are pursuing to resolve liquidity and cash shortages, will be introduced in October.

Mr Sharpe said McCormick Property Development of South Africa, developers and financiers of the project, had expressed worries about the economic situation Zimbabwe, more so, the planned introduction of bond notes.

The Mall of Zimbabwe project, to be completed at an estimated cost of $100 million, had also been approved by the City of Harare, which had issued it with a development permit after conducting its own EIA over a year ago.

Augur were given the land in a barter deal with the Government after financing, designing and construction of the Joshua Nkomo Express Highway connecting the Harare city centre to the Harare International Airport.

“We are waiting for confirmation from the investor, after the EMA application was approved; the investor said the economic situation was not clear. “The investor wants to assess the economic impact of bond notes. They want to know if they will be able to collect rentals in US dollars to recoup their money and if Government will not bring back the Zimdollar,” he said.

Further, he said there were concerns from the South African investor about the possibility that Government could bring back the local currency. This resulted in the South African company and its local partners holding a meeting to discuss its concerns with Minister of Finance and Economic Development, Patrick Chinamasa, for a clear position on Government’s plans.

Mr Sharpe said Minister Chinamasa categorically indicated that there will be no immediate return to the local currency before macro-economic fundamentals are right, especially in the short to medium term.

“They were waiting to hear that from the Ministry of Finance and Economic Development. They came here with their advisors. The minister confirmed that Government will not bring back the Zimdollar and that bond notes were only extended to the basket of currencies,” Mr Sharpe said.

But the developers now want to first assess what the economic impact of the new bond notes export incentive, which forms part of measures such as cash withdrawal limits, increased use of plastic money, reduction of bank charges and pricing in rand, meant to address cash challenges. “Definitely there will be some economic impact when bond notes are introduced. The investor wants to see if that will be negative or positive,” Mr Sharpe said.