HomeLocal NewsZim seeks US$5bn from China

Zim seeks US$5bn from China

GOVERNMENT is seeking US$5 billion funding from China to revive the once vibrant agricultural sector; fund the construction of a new parliament as well as to enable it to roll out a massive housing project; and kick-start some infrastructural projects.

By Herbert Moyo

Local Government minister Saviour Kasukuwere
Local Government minister Saviour Kasukuwere

A ministerial delegation comprising of Local Government minister Saviour Kasukuwere, Macro-Economic Planning and Investment minister Obert Mpofu and Agriculture, Mechanisation and Irrigation Development minister Joseph Made spent last week negotiating the deal with the Chinese, as the cash-strapped government continues its desperate search for funding for various projects aimed at stimulating economic recovery.

In the aftermath of Zanu PF’s 2013 election victory, the economy has been on a downward trajectory amid a severe liquidity crunch, company closures and job losses which have led to social protests and demands for President Robert Mugabe to step down.

However, according to highly-placed government sources there could be some respite after the Asian economic giant released US$46 million for the construction of a new parliament building in Mt Hampden and pledged to fund housing projects and agricultural production, among other projects.

“Work on the new parliament building is starting now and we expect to finish its construction before the end of 2017,” a senior government official said this week.

According to government sources, Zimbabwe was promised US$1 billion for housing developments in urban centres across the country.

The funds will enable the Zanu PF government to roll out an ambitious housing programme targeting youths and low-income earners, among other beneficiaries, as a campaign tool ahead of the 2018 general elections.

The government is in the process of acquiring farms in peri-urban areas to kick-start projects while also parceling out stands along partisan lines.

Government sources also revealed that the Chinese had agreed to fund agriculture on condition that it will benefit from the produce.

“They will also soon be releasing funding for various projects, including agriculture,” said one source, adding that the ministers were briefing Mugabe this week and will next week present to cabinet the outcome of their visit ahead of an official announcement of the agreements.

“On the agriculture side, China will provide funds for contract farmers to grow tobacco, flowers, cotton, soya beans and produce beef, among other products,” a source said. “That will result in the doubling of tobacco production next year onwards. We (government) will be re-organising farming associations and strengthening contract farming to supply China, which has become the biggest destination for our tobacco.”

Almost 200 million kilogrammes of tobacco was produced in the last farming season.

The sources said the “tobacco contract farming model will be replicated across other sectors of agriculture to meet China’s beef, pork, lamb and mutton, flowers, soya beans and citrus requirements”.

“In the past few weeks, the Chinese agreed to release over US$1,1 billion for the construction of the Kunzvi Dam and new parliament building in Mt Hampden. Of that amount, US$400 million is for the NetOne-Huawei project,” the source said.

NetOne is using the funds to expand its network to increase its subscriber base as well as provide faster broadband internet connectivity.

Mpofu, who signed the agreement for the parliament funds, said more agreements would be signed with China in agriculture and housing under the Economic and Technical Co-operation Agreement.

“We have submitted priority projects that we feel are key under our economic revival, that is support for agriculture as well as housing. That is why ministers Made and Kasukuwere are also present to beef up our delegation in arguing our case for the support,” Mpofu told the state media last week.

In June, government sent a delegation to China in June to discuss a deal for the construction and incorporation of Kunzvi Dam into Harare’s water supply system as well as the satellite towns of Chitungwiza, Norton and Ruwa. This followed a January announcement by Environment minister Oppah Muchinguri that the Zimbabwe National Water Authority and Chinese firm Sino Hydro were finalising an agreement for the construction of the dam on a build-operate-transfer arrangement.

Since 2014, senior government officials, including Mugabe, have gone to China in search of billions of dollars in rescue packages to revive the moribund economy. Last December, Chinese President Xi Jinping made a two-day stop-over in the country on his way to the China-Africa summit in South Africa — an event that was loudly trumpeted by government as the harbinger of the implementation of so-called mega-deals signed by the two countries.

Although several memorandums of understandings have been signed, China has been reluctant to release funds in the absence of a clear succession plan, concrete reforms in parastatals and state enterprises to root out corruption, mismanagement and improve efficiency and ensure good corporate governance.

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