The Zimbabwe government touts infrastructure as the core of President Emerson Mnangagwa’s economic policy, but weak support to an institution key to that agenda raises questions over its commitment.
The Infrastructure Development Bank of Zimbabwe (IDBZ) is meant to lead the country’s infrastructure investment. Last year, the bank, majority-owned by government, received the equivalent of US$6.89 million for capitalisation, closing the year with a capitalisation of US$21.7 million. This is just a fraction of what the bank needs to do its work.
“For the Bank to effectively deliver on its mandate, given the vast infrastructure deficit in the economy and benchmarking with other DFIs of a similar nature, it requires a capitalisation level in the region of US$500 million in the medium term and US$1 billion by 2030,” says CEO Zondo Sakala in the bank’s 2022 financial report.
The bank last year added US$138.9 million worth of new projects to its pipeline. But, according to the bank, only the equivalent of US$100,000 went into project implementation. That money was used for the Bulawayo Students Accommodation Complex (US$5.04 million), Waneka Phase III Housing Project (US$3.75 million) and Willsgrove Park Phase II Housing Project (US$1.27 million).
IDBZ disbursed only US$350,000 to prepare and develop projects.
“The amount remains insignificant in light of more than US$2 million that was required for preparation funding. An equivalent of (US$250,000) was disbursed from the Bank’s Project Preparation and Development Fund (PPDF) and US$100,000 for irrigation projects was disbursed from the National PPDF,” the bank says.
In 2022, three projects worth US$23.6 million were developed to bankability: Waneka Phase III Housing Development-Harare (US$2.5 million), Spitzkop Housing Project (US$1.3 million), and Lupane Student Accommodation Complex (US$19.8 million).
The African Development Bank estimates that Zimbabwe needs to spend as much as US$34 billion to close its infrastructure gap. According to Finance Minister Mthuli Ncube, to build infrastructure, the country needs to spend over US$3 billion annually. But this “far exceeds resources that can be mobilised in a fiscally sustainable way, whether from borrowings, taxes and private sector through Public Private Partnership Arrangements,” Ncube says in his 2023 budget strategy.
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