1.2.1 Financial Sector Stabilization Measures
The Government through Monetary Authorities has taken steps to stabilize the financial sector, through several initiatives – the Capitalization of the Central Bank, the ZAMCO Special Purpose Vehicle for Non-Performing Loans, which has brought relief to the banking sector, allowing for previously tied financial resources, to be, released for fresh lending to the productive sectors.
Over US$1 billion in NPLs have, been taken over by ZAMCO, creating scope for new bank lending and financial intermediation. In addition, Monetary Authorities also created the Credit Reference System, which will improve disclosure on existing customer indebtedness including bad debts. This will improve risk management and hence reducing the specter of bad debts. The Reserve Bank of Zimbabwe has also used moral suasion to reduce interest rates and bank charges, as part of promoting financial inclusion.
These initiatives have helped stabilize the financial sector and financial sector stability is critical, not only for financial intermediation but for also financial inclusion to harness the economic growth synergies that are part of the informal and semi-formal sectors of the economy.
1.2.2 Government Investment in Infrastructure
Government has also made substantial progress on infrastructure investment as below:
- Kariba South Project (due for completion in 2018 and adding 300MW)
- Hwange 7/8 (which has commenced & projected to add 600MW)
- Plumtree, Bulawayo, Harare to Mutare Highway Rehab;
- Beitbridge, Masvingo, Harare and Chirundu Highway (recently launched)
- Tokwe Mukosi Dam
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