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Harare - Zimbabwe plans to float a $100m bond to rebuild its
dilapidated infrastructure as the country struggles to attract foreign
investment, the finance minister said on Wednesday.
Zimbabwe's infrastructure, such as its roads, railways, dams
and power plants, has been starved of finance due to a decade of economic
collapse, which eased somewhat with the formation of a power-sharing government
in 2009.
"Very soon we are going to issue a $100m infrastructure
bond through our financial institutions," Finance Minister Tendai Biti
told an investor conference in Harare.
He gave no further details, but said Zimbabwe was taking
steps to reduce its external debt, a factor which has blocked funding for its
infrastructure projects.
Biti said Zimbabwe's debt - mostly owed to the Paris Club,
World Bank, African Development Bank and the International Monetary Fund - was
set to reach $8bn or 118% of the country's gross domestic product by the end of 2012.
Biti said the unity government, formed by bitter rivals
President Robert Mugabe and Prime Minister Morgan Tsvangirai, had agreed to
seek debt cancellation and use of minerals to clear the country's arrears with
international financiers.
"The debt strategy we have adopted here is unique to
Zimbabwe because it's a hybrid strategy," Biti said.
"It includes the adoption of traditional debt
resolution initiatives, combined with leveraging the country's natural
resources to achieve sustainable economic development."
Zimbabwe has been using the US dollar since 2009 when the
country abandoned the Zimbabwean dollar after inflation reached 500 billion
percent.
The coalition government has managed to stabilise the
economy but the country faces a cash crunch as investors stay on the sidelines.
Biti, who is a member of Tsvangirai's opposition Movement
for Democratic Change, said last week the government faced a shutdown
because projected revenue from the diamond industry had failed to come through.
Investors have been unnerved by the government's drive to
force foreign-owned mining companies to surrender majority stakes to blacks
under an economic empowerment programme.
At the conference, Biti sought to allay investor fears, saying the government did not plan to expropriate shares and he urged companies to look at Zimbabwe as a long-term investment destination.
