The African Development Bank (AfDB) mission in Zimbabwe is here for business as the country is critical for the institution, the bank‘s top official said yesterday.
BY NDAMU SANDU
Abdu Mukhtar, director of Industrial and Trade Development at AfDB told a private sector development roundtable forum in Harare that the private sector was critical to move the economy forward.
“Zimbabwe is critical for AfDB. We are here to do bu
siness,” he said.
“This is the beginning of something big for AfDB and Zimbabwe’s private sector. We are serious. We think this country is serious and the private sector in Zimbabwe is serious.”
Zimbabwe is hosting a 10-member delegation from the Abidjan-headquartered pan-African bank to unlock the potential of the private sector. The hosting of the private sector development roundtable discussion forum signals a new course amid renewed optimism since the ouster of former President Robert Mugabe in November last year. President Emmerson Mnangagwa has been singing the ‘Zimbabwe is open for business’ hymn to attract foreign direct investment which continues to give Zimbabwe a wide berth.
AfDB country manager for Zimbabwe, Damoni Kitabire, said the country’s private sector had shown resilience, having grappled for two decades with setbacks.
He said the outlook for the private sector was promising but required deliberate and strategic effort from the financial, agriculture, manufacturing, mining and telecommunications sectors and small-to-medium enterprises to bring that to fruition.
“The African Development Bank stands ready to collaborate with you to bring viable projects that will have positive spill over effects on the economy of Zimbabwe,” he said.
Zimbabwe is battling to access cheap lines of credit due to the country’s perceived risk attributed to the debt overhang of over $10 billion.
Early this year, AfDB advanced $25 million to Cabs for on-lending to productive sectors of the economy.
Reserve Bank of Zimbabwe governor John Mangudya told the forum there was positive sentiment with capacity utilisation going up to as much as 80% in some sectors.
Companies are struggling to access cheap working capital and face cash and foreign currency shortages.
Mangudya said the shortage of foreign currency is a side effect of a growing economy, adding increased production would generate more foreign currency.
Bankers Association of Zimbabwe president Webster Rusere said banks were constrained as they could not offer long-term loans due to the short-term nature of deposits. He said the economy had been paying for imports on a cash basis which was unsustainable.
“The introduction of letters of credit underwritten by AfDB could assist us. The funding that would have been unlocked will trickle to the informal sector which has to be formalised,” Rusere said.