Good governance key to securing more funding for Zimbabwe

Good governance key to securing more funding for Zimbabwe
Published: 17 February 2015
We note with pleasure the signing of a $270 million deal for the National Indicative Programme (Nip) between Zimbabwe and the European Union (EU) yesterday.

The deal is targeted at supporting agriculture, health and governance and institutional building and marks the resumption of co-operation between the bloc and Zimbabwe since 2002.

The Zimbabwean economy has been performing sub-optimally for some time now and one key factor has always stood above them all.

Zimbabwe needs capital injection. But the external debt overhang has been a sore issue. Very few multilateral financiers are willing to extend loans to the country, and are very cautious even when agreeing to lend to private sector firms.

While Zimbabwe has received funding from the African Development Bank (AFDB), the PTA Bank and several Chinese financial institutions, it has not been enough to get the economy back on its feet.

And we cannot expect any significant upturn in tax revenue when Zimra is simply taxing the same old companies that in any case, hardly have their heads above the water.

So the fact that the EU has decided to provide assistance directly through Treasury is welcome considering that a number of local civil society organisations are being investigated by the Washington administration for misuse of funds allocated to them for their work in Zimbabwe.

And the fact that the money will go towards the key sectors in the economy is a step in the right direction.

In addition to nine-mega deals for infrastructure signed with China last year and the ones signed with Russia, we can say Zimbabwe might be getting somewhere at last.
This kind of support will drive Zimbabwe's economy a long way forward.

But Government should also make sure that the sectors that receive the money will be able to sufficiently feed into the value chain and we can see growth in other sectors through these funds.

Government will have to apply fiscal prudence to make sure that the money goes to good use. Otherwise we might not get more funding at all.

We feel that there is so much more that groupings like the BRICS, EU,IMF and others can do to assist Zimbabwe.

Greater engagement with these emerging economies will help to ensure that Zimbabwe harnesses from the wealth and experiences of these countries.

But good governance and management will be key in helping to boost confidence in our country. And more money will thus follow.

- Bh24
Tags: Zimbabwe, EU,


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