World Economy

Zimbabwe Says Strong Capital Markets Key to $100b Economy

Zimbabwe Says Strong Capital Markets Key to $100b Economy Zimbabwe Says Strong Capital Markets Key to $100b Economy

Zimbabwe needs strong capital markets, credit rules and predictable national policy that attracts diaspora funding to help build an ambitious US$100 billion economy.

Government is targeting to accrue $1.2 billion in diaspora remittances this year, according to the treasury’s First Quarter Bulletin. This will be a 54% upturn from the estimated $780 million in remittances that came through in 2016, Dailymail online reported.

Panelists at the recent Financial Markets Indaba held in London concurred that a $100 billion economy is possible, leveraging on diaspora investment, taking a cue from other countries in the region whose economies have boosted by such remittances.

The indaba identified the diaspora as one of the low hanging fruits that could be utilized to speed up growth and bridge development gaps in agriculture, health, tourism and mining at a much faster rate than projected.

“In recent years, the African diaspora has supported many African economies through providing forex and supporting consumption for households. But the diaspora has capacity to do much more,” said program chairman and facilitator Patrick Muzondo.

“Panelists were able to identify mining, tourism, technology and health as the likely destinations of capital in Zimbabwe that could create a $100 billion economy.”

However, participants at the indaba also highlighted engagement and collaboration between government and the estimated three million Zimbabweans living outside the country as crucial in attracting diaspora investment.

One of the strategies in reaching out to the diaspora community is to instill confidence in the potential investors. “Confidence could be enhanced by reducing the cost of doing business in Zimbabwe, freely providing investment information to diaspora and reducing red tape,” said Muzondo.

 Raft of Reforms  

Zimbabwe has suffered low investor confidence due to perceived risk emanating from negative media reports.

Government has, however, through the office of the president and cabinet spearheaded a raft of reforms under the rapid results initiative to improve the ease of doing business, attract investment and ultimately grow the economy.

Additionally, government also launched the diaspora directorate last year to enhance engagement and participation of the Zimbabwean diaspora community in the national economic growth agenda.

The diaspora community has contributed through remittances mainly for consumptive purposes, leaving a gap for investment in productive sectors.

Government’s initiatives are aimed at spreading its focus to include Zimbabweans living abroad to participate in the economic turnaround by investing back home.

Indications from the London Financial Markets Indaba are that Zimbabweans living abroad are also the key drivers of the booming property industry, especially residential, with panelists agreeing that real estate is one of the best asset classes to allocate capital.

Out of the estimated three million Zimbabweans living outside the country, nearly half a million are based in the United Kingdom while 1.8 million are in South Africa, according to the United Nations Development Program.

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