via Govt tackles Zim-Asset bankability | The Herald August 6, 2015
MOST strategic projects in the Zim-Asset have failed to attract investors due to lack of evidence on their bankability, Finance and Economic Development Minister Patrick Chinamasa said.
The Zim-Asset, Zimbabwe’s five-year economic blueprint covering 2014-15, outlines a number of projects which are well articulated within four clusters.
Some of the projects include establishment of an avocado processing plant in Rusitu Valley in Chimanimani, dam construction, irrigation projects, road rehabilitation and water, sewer and reticulation systems.
Government has put in place measures to support the development of these projects after crafting the Joint Venture Bill, already before the Parliament, to create the legal framework for private sector participation in the implementation of the strategic projects.
Minister Chinamasa said due to lack of evidence on the bankability of the projects, there was low uptake.
He said the Government is capacitating the Treasury Infrastructure Projects
Unit to develop internal capacity to strengthen appreciation of projects bankability.
“A large number of projects in our Zim-Asset Strategic Plan do not have feasibility studies, and hence, provide very little information for Government and potential private sector investors to make sound investment decisions,” said Minister Chinamasa.
“In this regard, besides the Budget, Government is in discussion with development partners to mobilise resources towards development of projects to bankability.“
He said the Zim-Asset recognises the constraints on the Budget to mobilise adequate fiscal resources to finance the country’s infrastructure needs, hence, the need for joint venture partnerships.
“It is critical that we leverage private sector finance and bankable project preparation capacity towards supporting infrastructure through joint venture arrangements,” he added.
“This should, however, be complemented by institutional reforms and incentives to improve bankability of projects.”
Economic analysts say the fundamental problem was the projects articulated in the Zim-Asset were not bankable as they only articulate aspiration.
“Obviously, we have this situation because we don’t have feasibility studies on most of the projects,” economist Dr Gift Mugano said.