Zimbabwe moots infrastructure bonds, says Chinamasa

Source: Zimbabwe moots infrastructure bonds, says Chinamasa | The Financial Gazette February 28, 2017

FINANCE and Economic Development Minister Patrick Chinamasa say government is in the process of crafting two infrastructure bonds namely the Higher Education Infrastructure Bond and the Road Rehabilitation Bond.
This he said was in line with government’s thrust to improve state of infrastructure particularly on universities hostel construction and the rehabilitation of mostly potholed urban roads.
“At least the hostel will be able to generate own revenue through rentals and it is within that scope that we are crafting a Higher Education Infrastructure Bond which we will engage institutions such as Old Mutual to play a leading role on subscription,” he said.
Chinamasa was speaking during a farewell cocktail party for Old Mutual Emerging Markets chief executive officer Ralph Mupita who will be joining South Africa’s mobile giant MTN.
He said the current state of urban roads is unbearable hence it is government’s responsibility to ensure rehabilitation exercises are conducted.
The Minister said Old Mutual has always been a key player on supporting government funding initiatives through subscribing to Treasury Bills, Agricultural and Marketing Authority (AMA) Bills and IDBZ bonds among others.
He said the recent project funded by Old Mutual is the delivery of 2,800 low cost housing units in Budiriro while the Group invested US$5,1 million in a 1,6 megawatt mini-hydro power project in Chipinge that is now supplying electricity to the national grid.
The group also have various funding initiatives for the SMEs sector development and Chinamasa said the group should extend its coverage to other cities and towns.
Meanwhile, minister Chinamasa said government was currently capacitating the Zimbabwe Revenue Authority officials to be able to understand and analyse financial statements of multinationals who has been largely pointed as escape routes for capital from the country and rest of Africa.
He said so far at least four key areas have been identified as possible ways the global companies are illegally taking out cash from developing countries.
These include management fees which at times are 10 percent of gross revenue, royalties, fees for brand usage and interest rates.
“We need to be fair on each other, thus we will be engaging the multinationals going forward,” he said.