THE Zimbabwe National Chamber of Commerce (ZNCC) says government must issue a well-structured diaspora bond to increase foreign currency reserves, finance essential imports and pay off debts.
A diaspora bond is a debt instrument issued by a country — or potentially, a sub-sovereign entity or a private corporation — to raise funding from the diaspora.
The ZNCC said as Zimbabwe faced challenges in accessing international capital markets due to debt constraints and limited fiscal space, diaspora bonds could be the solution.
“Diaspora bonds offer a way to tap into the significant wealth of Zimbabweans abroad, who may be interested in contributing to the country’s development while earning returns on their investments,” the ZNCC said.
“A well-structured diaspora bond could attract additional foreign currency from the diasporan community, which would boost reserves and improve the government’s ability to fund critical imports, repay debt and stabilise the exchange rate.”
The development coincides with diaspora remittances being recorded northwards of US$1,5 billion annually.
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According to ZNCC, funds raised through a diaspora bond can be earmarked for priority sectors such as infrastructure, education and health, and renewable energy.
The chamber further argued that in order to win over the diaspora, it would be essential for government to ensure transparency in fund management, report on the use of proceeds, and offer competitive interest rates. It further stated that Zimbabweans living overseas must have trust in the government's ability to use the funds efficiently and repay the bond.
Zimbabwe’s foreign currency receipts surged by 9,5% to US$6,2 billion in the six months to June, mostly due to the growth in export receipts and diaspora remittances, according to Finance minister Mthuli Ncube.
Meanwhile, ZNCC said the sale of carbon credits, combined with carbon taxation, could generate significant revenue for Zimbabwe.
Preliminary estimates suggest that carbon credit projects in reforestation, renewable energy, and agriculture could generate up to US$100 million annually by 2028.
“Carbon credits provide non-debt revenue, reducing Zimbabwe’s reliance on traditional borrowing. The legislation surrounding carbon markets requires a review to promote efficient trading and market performance,” it said.