NMB plans to fund infrastructure projects

HARARE - Zimbabwe Stock Exchange-listed NMB Holdings (NMB) plans to fund infrastructure development, an area the banking group says has significant demand and growth prospects.

The group’s chief executive James Mushore said they were targeting essential infrastructure such as roads, and were currently working with the Zimbabwe National Roads Authority.

“We have neglected infrastructural spending in the past 30 years,” said Mushore, adding they were also considering funding several other sectors of the economy including SMEs and mining, “although we are a small bank, we have the expertise to arrange funding for these projects and we are now able to tap into our international partners,” he said. The financial services group, with a $15 million market capitalisation, recently received a $14,8 million capital injection from three strategic foreign investors, which will allow the company access to more international credit lines.

Zimbabwe’s infrastructure has significantly deteriorated in the past decade with government failing to service roads, railways, and airports.

According to the Infrastructure Development Bank of Zimbabwe, the country requires at least $20 billion to repair and modernise its infrastructure.

In a research paper on Zimbabwe, the World Bank has also said, “raising the country’s infrastructure endowment to that of the region’s middle-income countries could boost annual growth by about 2,4 percentage points.”

Zimbabwe made significant progress in infrastructure in its early period as an independent state, building a national electricity network with regional interconnections, an extensive and internationally-connected road network, and a water and sewer system.

But the country has been unable to maintain its existing infrastructure since it became immersed in economic and political turmoil in the late 1990’s. It now faces a number of serious infrastructure challenges, the most pressing of which lie in the power and water sectors, where deteriorating conditions pose risks to the economy and public health.

According to the World Bank, the country currently spends about $0,8 billion per year on infrastructure, though $0,7 billion of this is lost to inefficiencies of various kinds.

“Even if these inefficiencies were fully captured, Zimbabwe would still face an infrastructure funding gap of $0,6 billion per year.

That staggering figure can be reduced, however, to $0,4 billion if the country adopts a more modest spending scenario, or even to $0,1 billion under a minimalist, maintenance-only scenario,” noted the Bretton Woods Institution.

To close the gap, Zimbabwe needs to raise additional public, private-sector, and international funding, which, when coupled with the prospect of economic rebound and prudent policies, would allow the country to regain its historic infrastructure advantages.

Comments (1)

It is so obvious and this does not need a rocket scientist to tell you why was a country we are in this state. 1) Zanu Pf Officials are so wealthy and own almost everything movable and immovable state assets. 2) When Zimbabwe gained independence I was 13 years old, and the same people have held Governmental Posts, which clearly tell you they have outlived their usefulness. Their roll was to bring independence and the other take the button to the next level. 3) Take examples of Singapore,UAE, and South Korea, wise leadership develop a Nation and govern where everyone enjoy the fruits of their National Resources, here, those resources are for those who claim to have fought to bring freedom. Freedom, really? 4) Mugabe is 90 years old, surely, he needs to retire. Grace Mugabe was not voted President, therefore why should we suffer because of her selfishness.

themba - 6 April 2014

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