Commercial Farmers' Union of Zimbabwe

Commercial Farmers' Union of Zimbabwe

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CFU, BAZ join to stimulate investment

CFU, BAZ join to stimulate investment

Sunday, 11 March 2012 10:22

THE Commercial Farmers Union (CFU) and the Bankers Association of Zimbabwe 
(BAZ) are working on improving the country’s productive sector capacity by 
stimulating investment inflows leveraging on the real estate sector as 
collateral. The arrangement entails private enterprise mobilising funds and 
resources against the value of existing structures. They will also engage 
the government to act as a guarantor to mortgage transactions that are 
financed by foreign investors.

CFU president, Charles Taffs, said that should the arrangement be taken up 
at policy level, then this would ultimately lead to less dependence by the 
country’s productive sectors on the state.

“We want to mobilise funding for the productive base, this effectively 
reduces high dependence on imports as is currently the case and also 
increases the tax base translating into more revenue inflows for the 
fiscus,” said Taffs.

“Under this arrangement, the Ministry of Finance would need to ring fence 
investment into the mortgage market, thereby providing a guarantee for the 
ability to remit while payments will not change for the duration of the 

Before the inception of the inclusive government in 2009, Zimbabwe endured a 
protracted period of economic decline, characterised by world record 
hyperinflation, a massive flight of foreign capital and reduced foreign 
direct investment inflows.

Perceived country risk and outstanding arrears to multilateral financiers, 
among other issues, only served to accentuate the country’s isolation from 
the international community.

However, the economic stability brought about by the inclusive government 
left investors with real estate as the only asset class salvaged as savings 
in banks were eroded overnight with the adoption of the multicurrency 

The international community presently has a voracious appetite for new and 
emerging markets, he said.

BAZ president, John Mushayavanhu, said the arrangement would entail the 
creation of a cluster that would pool together real estate assets, which 
would consequently be used as collateral to secure five to 10-year financing 
from international investors.

“It would be a consortium in collaboration with local banks; banks which 
have customers who are borrowing on the basis of providing security in the 
form of real estate,” said Mushayavanhu.

“This will also lead towards a reduction in the cost of borrowing. We 
shouldn’t have problems with this type of arrangement.”

He added that the country risk needed to be underwritten.

Zim experiencing more cash outflow:Taffs

Zimbabwe is presently experiencing a huge liquidity crisis as the 
export/import ratios are out of control while the export bill remains high.

“Consequently a lot more cash is going out (of the country) than that coming 
in,” said Taffs.

“When the finance ministry provides this guarantee, the CFU then goes into 
the international market to search for wholesale money, bring it back to the 
country and lend it against the value of existing assets.


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