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President Robert Mugabe’s got a thick skin. After years of poor economic decisions – ranging from land grabs to indigenous control of local companies– he is optimistic many in the world will trust him with their money.
He is particularly eager for his friends like South Africa, China and Russia to stump up. And, he thinks Zimbabweans forced to live elsewhere through economic and political necessity will be willing to make a contribution through ‘diaspora bonds’.
Zimbabwe is a country that has gone backwards developmentally under Mugabe. This is evident to any visitor driving along the potholed roads of its main city, Harare, or through its overgrown countryside – once dominated by neat, highly productive commercial farms.
The ageing statesman needs a staggering sum to pay for a five-year plan to rebuild the country. Even if his friends were feeling generous, there’s that additional problem of corruption that will niggle at potential donors.
Think Mugabe can pull this one off? Would you invest in a diaspora bond? Or investigate having a business in a Zimbabwean special economic zone? Share your views, below this article. – JC
Mugabe’s plan to revive Zim: diaspora bonds, Chinese-style special economic zones, SA funds
HARARE (Reuters) – Zimbabwe requires $27 billion – more than twice the size of its economy – to fund a five-year plan to improve basic services and rebuild the impoverished country, a senior government official said on Wednesday.
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 percent a year by 2018.
But the ambitious 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 percent this year from 3.4 percent 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 $27 billion, 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 $11.6 billion 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 $1.8 billion 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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