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Harare - The World Bank's International Finance Corporation (IFC) said it is assisting Zimbabwe with regularising and improving its operating environment to attract investors and pave the way for potential advancement of financial packages for the country's private sector.
Many financiers and lenders are shunning Zimbabwe because of its high risk perception and inhibiting regulatory and operating framework. Fund managers, economists and other experts have blamed factors such as indigenisation laws and sudden policy shifts and announcements for the subdued investment inflows into Zimbabwe.
Officials from the IFC - who are in the country to meet business executives - have however dashed high expectations of any immediate financial packages, signalling the huge amount of work Zimbabwe still has to do before international partners start seeing it as a worthy investment destination.
"We want to support Zimbabwe in the improvement of the operating environment. This mission will allow us to meet and talk to those in the private sector [and hear their concerns]," said Oumar Seydi, regional director for the IFC.
Saleem Karimjee, a senior manager with the IFC, said the visit to Zimbabwe - the first such mission since 2001 - was "a step in the beginning of our exploration" of opportunities for the private sector in Zimbabwe. The IFC team said it invests in sectors such as finance, infrastructure and agribusiness as well as manufacturing.
"We intervene in all sectors... banks, insurance extend our reach as we co-operate with the financial sector and give them the muscle to support other sectors," added Seydi.
Struggling economy
Zimbabwe's Finance Minister Patrick Chinamasa said the private sector is important in efforts to grow the government's purse. The economy is currently struggling with lack of capital to restructure its industry, whose capacity utilisation has nosedived to below 40%.
Chinamasa said: "Our industry requires retooling… and we need to grow our capacity." He emphasised that Zimbabwe's arrears to the World Bank, International Monetary Fund and other financiers is "inhibiting" the World Bank from "granting us capital".
He said following the visit to Zimbabwe, the IFC team's immediate task would be to work toward creating an operating environment conducive to investment into and growth of the private sector. Zimbabwe's external debt has ballooned to over $8bn, most of it in arrears.
Although the World Bank is not presently advancing any packages to Zimbabwe, said Chinamasa, there is nothing in its statutes and guidelines that prohibits the institution from advancing assistance to the private sector.
