Diaspora bond on the cards

Presenting the mid-term 2010 budget review in Harare last Wednesday, Biti said the government was finalising the modalities of setting up a US$50 million Diaspora Bond whose proceeds would be used to finance economic activities in Zimbabwe.

Government, in conjunction with local commercial banks and Afreximbank, is arranging a Diaspora bond amounting to US$50

million, which should also benefit our productive sectors, Biti said.

Biti said efforts to establish the Zimbabwe Economic and Trade Revival Fund (ZETRF) would also be finalised during the last half of 2010, with an initial start-up capital of US$50 million already identified.

He said discussions were underway with various southern African countries over facilities to finance Zimbabwe business entities on the basis of win-win arrangements. The provision of fresh lines of credit in this economy will provide the necessary Regeneration and Revival that this economy requires. The next few months will, therefore, see major energy being expended in operationalising such facilities, he said.

Talk of the Diaspora Bond came as Biti bemoaned the absence of substantial support for industry in terms of lines of credit.

A meagre US$656 million was availed by international financial institutions to the domestic productive sector in 2009 against a

target of US$1 billion sought.

External support has not performed to expectations either during the first five months of 2010, with only US$195.92 million having been disbursed against commitments of US$605 million.

The major financier remained Afreximbank whose facilities for the first half of 2010 amounted to US$268.5 million. The proposal to create a Diaspora Bond follows a suggestion by the New York-based Council for Zimbabwe earlier this year to assist the Harare

authorities harness resources for the economic reconstruction of Zimbabwe.

Council for Zimbabwe said the fund was part of ways in which Zimbabweans based abroad wanted to come up with practical solutions to jump-start the social and economic revival of their homeland.

It said the fund would also act as a mechanism to ensure that professionals can contribute their skills to uplift Zimbabwe in an

organized and effective manner.

Researchers at the University of Manchesters Brook World Poverty Institute in the United Kingdom also earlier this year proposed the introduction of a controversial nationality tax which should be levied by the Harare government on Zimbabweans based in the Diaspora in exchange for retaining their citizenship.

The researchers said Harare should come up with various confidence-boosting measures to entice citizens living abroad. Confidence boosting measures would include allowing dual nationality, restoring voting rights of migrants who hold Zimbabwean citizenship and creating mechanisms and platforms for them to be heard.

The plan would also see the more than three million disenfranchised Zimbabweans living in the Diaspora having their voting rights restored to enable them to participate in the countrys socio-political development.

About a quarter of Zimbabwes 12 million people have left the country since 2000 to escape economic hardships and political repression.

President Robert Mugabes government has in previous elections denied the exiles most of who are believed to support the former opposition Movement for Democratic Change the opportunity to vote saying it did not have the resources to enable all Zimbabweans spread across the globe to vote.

Only Zimbabweans posted abroad on government duty have been able to vote by post in previous elections. For the past decade, Zimbabwe witnessed an unprecedented and crippling flight of skilled professionals across all sectors of the economy.

Skill areas affected included doctors, nurses, teachers, university lecturers, engineering, surveying, veterinary as well as forensic

sciences.

This has resulted in the near collapse of social service delivery while industry has also witnessed skills flight of artisans and other

qualified personnel.