By Bright Madera

CAIRO-BASED African Export and Import Bank will soon introduce Diaspora bonds to harness resources from Zimbabweans living abroad, a senior official has said.

The bank’s regional manager, Mr Gift Simwaka, said there was a lot of untapped cash from Zimbabweans in the Diaspora, adding that the bank would act as a guarantor.

He said the bonds would be launched before the end of the first half of the year, and that Afrexim Bank would continue supporting Zimbabwe’s reconstruction.

A bond is a formal contract to repay borrowed money with interest at fixed intervals.

“We are currently planning to come up with Diaspora bonds, after realising that those in the Diaspora have the funds to invest and what they only want is security on their investments.

“Afrexim Bank will be the guarantor of the investment and we are going to actively play the advisory role of business.

“Zimbabwe is a partner, and they will benefit from this fund-raising initiative,” said Mr Simwaka.

The idea of the Diaspora bond was mooted in May last year in a bid to enlist the services of non-resident Zimbabweans to help rebuild the economy.

Analysts have applauded the initiative, saying this would be a starting point for those abroad to participate in the country’s economic turnaround programme.

Such bonds are useful for tapping into the wealth of the Diaspora for financing infrastructure, housing, health and education projects in many developing countries.

Mr Simwaka added that it was conceivable that reputable private companies could also consider issuing Diaspora Bonds.

Besides patriotic reasons, the Diaspora investor would be willing to offer a higher price, and demand a lower yield, for these bonds compared to a typical international investor.

Afreximbank has stood by Zimbabwe

during challenging times through making available lines of credit in support of the economy.

The bank has extended US$250 million lines of credit to Zimbabwe to support the country’s mining and agricultural sectors.

There has been growing interest and more commitment to capture the Diasporans to rejuvenate the economy.

A number of initiatives are also lined up to entice Diasporans, many of whom have already expressed their willingness to participate in reshaping the economy.

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