Diasporans can help turn Zimbabwe economy

Published: 07 September 2017

ZIMBABWEANS in the Diaspora have the capacity to contribute significantly towards reviving the country's ailing economy, which is afflicted by low levels of foreign investment.

Diaspora Infrastructure Development Group (DIDG) chief financial officer and executive director, Washington Mashanda, whose consortium consisting largely of Zimbabweans living abroad recently won a $400 million tender to recapitalise the National Railways of Zimbabwe (NRZ) jointly with Transnet, said yesterday that Zimbabweans living in the Diaspora should take a leaf from countries such as India and Ireland where citizens abroad are increasingly investing in their home economies.

"As diasporans, we have operated in far more challenging environments and have been part of turnaround solutions for these other countries and yet we shy away from Zimbabwe. Diaspora skills and capabilities are huge and we are confident we can contribute to the recapitalisation and re-industrialisation of our country," Mashanda told The Financial Gazette in an email interview.

He said his organisation, which has amassed expertise in sourcing funding, leading large scale capital projects as well as working with original equipment manufacturers to provide fully funded technical solutions to large industrial and infrastructure projects with combined capital budgets of over $2 billion, believed Zimbabwe had a lot of investment opportunities that could be tapped by both local and international investors.

"The opportunities far outweigh the challenges in our view but we are not naïve to the challenges ahead. We have decided to be bold and ambitious as we have an opportunity to be a catalyst in making Zimbabwe the next fastest growing economy and become the regional frontier. As Zimbabweans in the Diaspora, we think it's a worthy cause," he said.

Zimbabwe is grappling with high unemployment levels, a collapse of public services and banknote and foreign currency shortages.

Unemployment currently stands at over 90 percent, according to the Zimbabwe Congress of Trade Unions.

Mashanda said there was need for policy consistency for the economy to be fully revitalised.

"We don't think there is one silver bullet for Zimbabwe but rather a whole series of interventions," he said, adding that the Diaspora policy coupled with investment protection and incentives could be the trigger to mobilising foreign inflows.

"We think we can drive this aggregation of Diaspora investments into impactful areas. The official Diaspora remittances in 2015 and 2016 reached $939 million and $740 million, respectively, which were only done by two percent of the Diaspora through official settlement channels. If this Diaspora investment aggregation agenda is successful, we can see the inflows from Diaspora remittances grow to over $2 billion a year," said Mashanda.

"Zimbabwe is a sleeping giant and we are looking forward to being a significant factor in driving economic growth. We are encouraged by the creation of special economic zones and other incentives for investment," the Johannesburg-based Mashanda said.

DIDG, with its South African partner Transnet, is expected to help turnaround the fortunes of the NRZ by providing funding to acquire and refurbish wagons, rehabilitate the track infrastructure, upgrade the company's information communication technology and signalling systems and increase the parastatal's capacity to move goods.

The NRZ, which owes more than a year's salary to workers, was once one of the largest employers in Zimbabwe but its fortunes tumbled after an economic crisis between 2000 and 2008.

Most of NRZ diesel and electrical locomotives are out of service while passenger and freight services are constantly cancelled.

Other challenges facing the company include widespread collapse of the rail infrastructure, vandalised communication equipment and dilapidated yard facilities.

At its peak, NRZ moved 18 million tonnes of freight annually.

Last year, the company moved three million tonnes of freight and has a target of 3,7 million tonnes in 2017.

Transnet, in the same year moved 219 million tonnes, generating revenue of R65 billion, with earnings before interest, taxes, and amortisation of R27 billion and a workforce of 58 828 employees.
- fingaz

Tags: Diaspora,