ZIMBABWE’S investment agency has revealed that the country is facing significant challenges in securing insurance coverage for major projects, citing international sanctions as the primary obstacle.
This hurdle underscores the far-reaching impact of the embargo by western countries on Zimbabwe’s economic development and growth prospects.
The southern African country is still under the Zimbabwe Democracy and Economic Recovery Act (Zidera) sanctions.
The United States government early this year removed sanctions on some individuals and entities, but maintained President Emmerson Mnangagwa, his wife, key government officials and associates on the red list.
Zimbabwe Investment Development Agency (Zida) chairperson, Busisa Moyo told Standardbusiness in an interview that Zidera was one of the primary obstacles to the country’s economic progress.
“There are challenges. Zimbabwe has some peculiar things like the fact that we are economically isolated,” Moyo said.
“We have arrears; we have a smart regime of sanctions.
“That is been modified, yes, but it has affected our ability to finish (some of our projects). For example, you can’t get insurance for large-scale projects in Zimbabwe.
“People don’t realise this. When we say sanctions affect Zimbabwe, they think it is just a political rhetoric.
“Now go to MIGA (Multilateral Investment Guarantee Agency) which is the insurance side of the World Bank, you can’t get insurance.
“They will say, ‘oh, it is because of arrears.’ Yes, we are in arrears but we cannot restructure our arrears as long as sanctions or Zidera remain.
“So, it is a chicken and an egg situation and people play cat and mouse. But it’s a real issue, which we have to look for creative ways.”
Moyo highlighted challenges faced by public private partnerships (PPPs), saying only 10% of them get to financial closure.
“So, this is where we have a private sector player who says, ‘I have got the resources and I can do this.’ And we have got government who says, ‘we are willing to have this project.’ But only 10% actually get to the conclusion to financial close and get the project commissioned,” he said.
“There are some projects that may look exciting socially, but (not viable) from an economic point of view. The other challenge was champions. You need a champion who is passionate for a project to see it through.”
Moyo urged the government to make sure that they have champions with a long term of office to minimise disruptions.
“We are so bent on terms of office, sometimes to the detriment of our own progress,” he said.
“So, we have to look and say, ‘look, allow this gentleman to extend his term.’ This is a controversial topic, but how are we going to do things differently?” he asked rhetorically.
“Because a new person comes in, they start another project. The last one doesn’t reach financial close.
“So, we are having conversations to say, how do we go beyond terms of office.”
Development economist Chenayimoyo Mutambasere recently told our sister paper NewsDay that the renewed sanctions on Mnangagwa and some key government officials and business associates retain Zimbabwe in diplomatic isolation, with the mining and banking sectors likely to be impacted.