The arrangement entails private enterprise mobilising funds and resources against the value of existing structures. They will also engage the government to act as a guarantor to mortgage transactions that are financed by foreign investors.
CFU president, Charles Taffs, said that should the arrangement be taken up at policy level, then this would ultimately lead to less dependence by the country’s productive sectors on the state.
“We want to mobilise funding for the productive base, this effectively reduces high dependence on imports as is currently the case and also increases the tax base translating into more revenue inflows for the fiscus,” said Taffs.
“Under this arrangement, the Ministry of Finance would need to ring fence investment into the mortgage market, thereby providing a guarantee for the ability to remit while payments will not change for the duration of the loan.”
Before the inception of the inclusive government in 2009, Zimbabwe endured a protracted period of economic decline, characterised by world record hyperinflation, a massive flight of foreign capital and reduced foreign direct investment inflows.
Perceived country risk and outstanding arrears to multilateral financiers, among other issues, only served to accentuate the country’s isolation from the international community.
However, the economic stability brought about by the inclusive government left investors with real estate as the only asset class salvaged as savings in banks were eroded overnight with the adoption of the multicurrency regime.
The international community presently has a voracious appetite for new and emerging markets, he said.
- Chamisa under fire over US$120K donation
- Mavhunga puts DeMbare into Chibuku quarterfinals
- Pension funds bet on Cabora Bassa oilfields
- Councils defy govt fire tender directive
Keep Reading
BAZ president, John Mushayavanhu, said the arrangement would entail the creation of a cluster that would pool together real estate assets, which would consequently be used as collateral to secure five to 10-year financing from international investors.
“It would be a consortium in collaboration with local banks; banks which have customers who are borrowing on the basis of providing security in the form of real estate,” said Mushayavanhu.
“This will also lead towards a reduction in the cost of borrowing. We shouldn’t have problems with this type of arrangement.”
He added that the country risk needed to be underwritten.
Zim experiencing more cash outflow:Taffs
Zimbabwe is presently experiencing a huge liquidity crisis as the export/import ratios are out of control while the export bill remains high.
“Consequently a lot more cash is going out (of the country) than that coming in,” said Taffs.
“When the finance ministry provides this guarantee, the CFU then goes into the international market to search for wholesale money, bring it back to the country and lend it against the value of existing assets.
