BY TINOTENDA MUNYUKWI
Speaking in Harare on Monday at the Water Resources Infrastructure Investment Conference, Chinamasa told potential investors that the government was now prioritising innovative funding models that do not expose the country to unsustainable debts.
“We prefer innovative funding models that do not expose the country to unsustainable debts,” he said.
“To this end, our preference, as Treasury, is long-term capital. We are not looking for international loans, but equity.”
Chinamasa assured potential investors that under the new model, they would be able to recoup their investment within the power generation and water infrastructure sectors in which revenue streams would be generated from users of the investment.
“All investments into water must be recouped, we are not charity organisations.
“Therefore, the revenue streams should be generated from the user fees, the user will have to pay for the water,” he said.
“Various fiscal incentives are available for serious investors and we are granting duty exemption for importation of capital equipment.
“We will grant national project status to various projects that may exempt specific projects from various taxes.”
Presently, the Reserve Bank of Zimbabwe (RBZ) has loan facilities of over $1 billion to try and fix the liquidity crisis.
RBZ governor, John Mangudya called for investment in water infrastructure, saying there was a linear relationship between the country’s gross domestic product (GDP) and the availability of water.
“Water and storage infrastructure for water is very critical for agriculture, which is the backbone of this economy,” he said.
“When there is drought in this economy, the GDP goes down.
“People need more foreign currency when there is drought to import produce, so there is a linear relationship between Zimbabwe’s growth of GDP and the availability of water in this economy.”
Since President Emmerson Mnangagwa’s inauguration last year, the government has embarked on a journey in search for foreign investment to try and turn around the country’s dwindling economic fortunes.
Zimbabwe’s large debt has made it unattractive for loans, forcing the government to look for alternative investment such as equity investment.
Global investment trends have shown investors moving to equity-based investment on the back of it having lower risk, as it does not involve a physical presence by the investor and is easier to track.