Nqobile Bhebhe, Senior Business Reporter
BANCABC Zimbabwe chief executive officer, Dr Lance Mambondiyani, says the ongoing development projects in Zimbabwe are crucial in enhancing investor confidence.
To that end, the financial institution says it would continue to scout for international partners to fund several key national projects including housing provision.
A local banking subsidiary of the Pan-African group, Atlas Mara, BancABC is currently drawing down an $11 million loan facility advanced by Shelter Afrique for low-cost housing units in Bulawayo, Gweru, Masvingo, Mutare and Harare.
The first project, which consists of 90 fully serviced stands was recently unveiled in Bulawayo at Hopelyn Housing Estate near Mahatshula suburb.
Shelter Afrique is a Pan-African banking institution that exclusively supports the development of affordable housing and real estate sector development in Africa.
In an interview on the sidelines of the launch, Dr Mambondiyani told Business Chronicle that the financial institution is aware of the perceived country risk but would not stop engaging international financiers.
The coming on board of Shelter Afrique with $11 million is a positive development towards countering the country’s risk, he said.
“Having an organisation as big as Shelter Afrique providing us funding, $11 million shows that there is confidence in the country,” said Dr Mambondiyani.
“Yes, there are peripheral issues that always stand in the way but we would like to deal with most of the international funders on a case-by-case basis.
“We face restrictions at some instances due to perceived country risk but we are ready to deal more with organisations such as Shelter Afrique, which has shown faith in the country,” said the banker.
Earlier, he had told guests that when talks began with Shelter Afrique, the bank aimed to secure $20 million.
“But owing to misperception, it (Shelter Afrique) said the country has too many risks. We managed to conclude a facility of $11 million for the contribution of new stock of housing.
“As BancABC we are committed to playing our part to engage in financial intermediation where we can. If we can bring international partners who probably couldn’t come because they were told of country risks, we do not care about country risk.
“Our only responsibility is to make sure that we are doing the best we can within the area of providing financial solutions,” said Dr Mambondiyani.
He said funding from Shelter Afrique was available until it was exhausted and currently “we are now moving city by city picking up projects and partnerships with developers who can assist us with building new housing stock”.
According to the bank, the response from local authorities has been encouraging and the ministry of national housing has assisted in facilitating meetings with almost all mayors and town clerks to introduce the concept.
The project, developed by BancABC is from $11 million funding availed by Shelter Afrique in 2011, is targeting the construction of houses for low to middle-income earners countrywide.
In 2011, BancABC and Shelter Afrique extended loans valued at US$7 million for the construction of houses across the country.
Shelter Afrique further availed another US$5 million in 2015 for the importation of building materials and equipment.
The purpose of the facility is for onward lending for mortgage origination supporting house construction, home extension and home improvement, funding housing projects for potential developers and financing small-scale commercial projects such as small shopping malls.
The project aligns with the short, medium and long-term plan by the Government to attain decent housing for all in line with Vision 2030. The Second Republic has been making concerted efforts to improve the Ease of Doing business as it moves to attract Foreign Direct Investments (FDIs) into the country.
The Ease of Doing Business index ranks countries against each other based on how the regulatory environment is conducive to business operation and stronger protections of property rights.
Economies with a high rank (1 to 20) have simpler and friendlier regulations for businesses.
The establishment of the Zimbabwe Investment and Development Agency (Zida) is one of the successes of the New Dispensation’s economic reforms aimed at rejuvenating the productive sector and creating more jobs.
The organisation is among other responsibilities tasked with specifically promoting, appraising and recommending private-public partnerships, investor after-care and monitoring of projects as well as promoting decentralisation of investment activities.
The grand plan is to realise an upper-middle-income economy by 2030. — @nqobilebhebhe