The bonds, planned for next year, are a way of raising funds to fix their infrastructure in the continent.According to a Comesa newsletter issued at the ongoing 15th Heads of State and Governments Summit in Malawi, infrastructure development will only be enabled if all the regional blocs work towards using the least possible resources to implement and deliver appropriate solutions to the infrastructure challenges.
“Extra-inventory costs due to delays and inefficiencies in the corridors have a significant impact on the total costs of the goods, accounting for 10-25% of the total logistics cost,” said secretary-general Sindiso Ngwenya.
Lined up projects include the upgrading of road capacity by adding lanes to roads with heavy traffic, the rehabilitation of paved roads whose poor condition affect corridor performance and the upgrade from gravel to paved standards key feeder roads that serve the corridor.Comesa said an estimated US$93 billion was required to upgrade infrastructure in the next decade.
The issuing of regional bonds will mark a shift for the regional blocs, which have been banking on donor financing to fund infrastructure projects as huge budget deficits left governments unable to meet such expenditures.
In a related development, Comesa member states recorded improved Foreign Direct Investment inflows in 2010 of up to US$19,8 billion from US$16,6 billion in 2009.
The trading bloc has also seen 53 bilateral investment treaties signed between member states with Zimbabwe having signed four.Comesa’s acting director of Investment Promotion and Private Sector Development at the bloc’s secretariat, Thierry Mutombo said major drivers for this growth were inflows into Libya, Democratic Republic of Congo, Mauritius and Uganda.
“Regarding the international investment rules, as of June 2011, 53 Bilateral Investment Treaties (BITs) between Comesa countries have been recorded out of 374 in total,” he was quoted as saying by the Comesa website.
Egypt recorded the highest number (11 BITs) signed with other Comesa countries followed by Mauritius (six BITs) and Zimbabwe (four BITs)”.Zimbabwe is set to ratify all outstanding Bilateral Investment Promotion and Protection Agreements (Bippas) and on Tuesday Parliament approved Bippa’s with Botswana, India and Iran.
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Conditions of the Botswana Bippa include a US$70 million credit facility, which is meant to promote joint private business partnerships between players from the two neighbouring countries.
Botswana has regularised the trade blueprint, which was signed in March and was waiting for Zimbabwe to follow suit.Both the Indian and Iranian agreements were signed in 1999 with the primary aim of fostering mutual trade benefits between Zimbabwe and the two countries.
