The Sunday Mail
Zimbabwe should not over-rely on external aid, as doing so tends to retard economic growth and perpetuate poverty, African Development Bank resident representative Mr Mateus Magala has said.
Instead, focus must be on developing innovative strategies that boost domestic capital formation, employment creation and infrastructure development.
At the handover of a US$110 million development grant by AfDB to Zimbabwe in Harare last week, Mr Magala said developing countries should aim to create wealth and reduce poverty.
“We believe wealth creation and poverty eradication are key towards the growth of a country’s economy. Perpetual dependence can also slow down progress,” said Mr Magala, who also pledged the AfDB’s continued support to economic recovery efforts in the country.
“We hope this (grant) will contribute towards projects, promote and accelerate the engagement of Zimbabwe and the international community.”
Without providing details, Mr Magala said the continental bank had received more resources for funding Zimbabwean projects under its African Development Fund.
The US$110 million is earmarked, mainly, for capital development projects in the areas of infrastructure, energy and water.
A Kariba Dam project will chew up US$35,6 million, Finance and Economic Development Minister Patrick Chinamasa said. Kariba produces 750MW of electricity, half Zimbabwe’s current generating capacity.
At least US$16 million will go towards the Alaska-Karoi electricity transmission line; while refurbishment of water and sanitation projects in Bulawayo will get US$37 million.
Mr Chinamasa said another US$1,9 million would go to development of the energy master plan and US$5 million to the proposed Women’s Bank.
Government will also pay US$5 million as part of its membership subscription to the African Trading Insurance Agency, as it seeks to boost its risk profile.
Minister Chinamasa admitted to under-funding capital projects, saying only eight percent of the 2015 National Budget had been set aside for that.
“It means we are not saving for the future,” he said.
And to turn around the economy, infrastructure development would have to be prioritised, according to the AfDB representative.
This, said Mr Magala, could also help draw FDI, an area Zimbabwe has been lagging behind in when compared to its regional counterparts like Mozambique and Zambia.
Late last year, the Zimbabwe Multi-Donor Trust Fund earmarked US$35 million for urban energy and infrastructure rehabilitation.
The money was being distributed under the Fund’s Emergency Power Infrastructure Rehabilitation project.
Low investment in energy infrastructure has stunted industrial growth, while a similar lack of money being put into water has resulted in losses in businesses and in terms of human life through disease outbreaks.
Industrialists have blamed poor infrastructure for low overall economic performance, with the railway network system cited as a major blow to development.
Experts say rehabilitation of the road and rail networks is critical and has potential to unlock real value through employment creation and ease of doing business via cheaper movement of raw materials and finished products, as well as people.
