"The Diaspora Bond Increases Our Debt," Economist Prosper Chitambara

Economic analyst, Prosper Chitambara has said the diaspora bond which was recently proposed by Finance and Economic Development Minister Mthuli Ncube will increase Zimbabwe’s debt.

Ncube told diasporans in New York recently that diasporans investing in the diaspora bond will get a 9% interest rate. He said:

We want to invest back home, so first thing is that we can invest through a diaspora bond. We are about to issue the diaspora bond in the next few months. We will be getting 9% in terms of interest, which is a very attractive bond. What we can also do is to set up a structure where you rather than sending money every month to relatives. The interest yield can be used to look after your parents and significant others in Zimbabwe. Your investments are very safe in Zimbabwe.

Prosper Chitambara said the diaspora bond would only worsen the country’s situation. NewsDay quotes him as saying:

The diaspora bond increases our debt because bond is a debt instrument. Something that could also be of concern is that our huge external arrears could probably discourage some people from participating in this bond. However, it’s good to tap into the diaspora as a way to mobilise resources to finance critical infrastructure and other requirements at home.

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The Reserve Bank of Zimbabwe reported that the southern African nation received a total of US$797 million in diaspora remittance during the first half of 2022.

In his midterm review statement presented in July 2022, minister Mthuli Ncube said Zimbabwe owed about US$12 billion to external creditors.

Pindula News