GOVERNMENT has asked for African Development Bank (AfDB) expertise to mortgage the country’s mineral resources and get foreign capital needed to grow the economy.
BY OUR STAFF
The move comes at a time Foreign Direct Investments (FDIs) have been low as investors sit on the fence, citing the empowerment laws as an inhibiting factor.
It also comes at a time government is weighed down by recurrent expenditure and dwindling revenue inflows.
Finance minister, Patrick Chinamasa met a team from AfDB led by regional director for southern Africa, Ebrima Faal on Friday where he presented Zimbabwe’s pledge.
Mineral resources would be used as security in accessing capital needed to grow the economy.
Chinamasa said Zimbabwe should be able “to use the reserves to unlock access to capital we can use to develop our country”.
However, Chinamasa said the country has to know the quantities of the minerals resource.
“When we have quantified the reserve, it is easy to go to investors and say this is what we have. They [AfDB] have promised to look into it,” Chinamasa said.
“I would prefer that the team [AfDB] comes here sooner rather than later.”
Statistics from the central bank showed that the country has gold reserves of 13 million tonnes. At a current annual extraction rate of 20 tonnes per year, it would take over 600 000 years for the reserves to be exhausted.
RBZ said platinum reserves were over US$2,5 billion tonnes.
At an attraction rate of 2,3 million tonnes per year, it would take 1 200 years to exhaust the resource.
Despite the rich mineral endowment, Zimbabwe has remained poor as it is unable to unlock the mineral wealth.
Developed countries such as Australia have used minerals as mainstay for the economies.
Chinamasa last week said government had discussed with AfDB innovative ways through which the country can settle its arrears with multilateral institutions.
“We have given them some of our thoughts,” he said, adding that the clearance of the debt would enable the country to access concessional loans from the bank.
Zimbabwe owes about US$800 million to the African Development Bank (AfDB), in which US$528 million is in arrears.
Chinamasa said AfDB was assisting the country’s re-engagement with the international community and pleaded with the regional bank to avail loans to various sectors of the economy.
As of June, AfDB had disbursed US$6 million directly to the private sector.
The lines of credit were in addition to those disbursed by institutions such as the African Export-Import Bank (Afreximbank) and PTA Bank, where AfDB has shareholding.
The bank is a shareholder of Afreximbank and PTA Bank, for which Zimbabwe’s country operations amounted to 11% and 26% of investment operations respectively in 2012.