eBusiness Weekly
Business Writer
In a strategic move to create fiscal space in the 2024 National Budget, the Government has engaged Africa50, a pan-African infrastructure investment platform, to initiate an asset recycling programme to unlock the value of existing government infrastructure projects and generate funds for high-priority development initiatives.
Asset Recycling is an innovative way for governments to unlock capital currently tied down in state-owned infrastructure assets by presenting them to credible private institutions that will pay a fair price to the government for the right to manage and operate the assets over a pre-determined period under a concession framework.
Under the initiative, three airports have been identified for asset recycling under this programme, according to a report by the Treasury on sovereign debt.
These are Robert Gabriel Mugabe International Airport, Victoria Falls International Airport, and Joshua M. Nkomo International Airport. These airports represent valuable assets with the potential to attract private sector investment and generate significant revenue streams.
In addition to airport asset recycling, the refinancing of the Harare-Masvingo-Beitbridge Highway has also been earmarked for this program.
This strategic road corridor is considered a low-hanging fruit for asset recycling, as it is currently funded from the national budget.
According to the report, the asset recycling process will enable the government to channel the resources mobilized from this initiative towards other critical infrastructure projects that are essential for sustainable economic development.
These projects include energy infrastructure, transportation networks, and telecommunications systems.
Recognizing the challenges in attracting external financing for thermal power projects, the Government has also initiated discussions with regional financial institutions to explore innovative financing mechanisms for coal power generation projects.
As Africa50 has been advocating for Asset Recycling as a solution that African countries can use to raise capital to fund infrastructure and their post-Covid19 recovery programme especially within the context of the current global economy.
Alain Ebobissé, Africa chief executive said asset recycling would send a powerful message from Africa to the rest of the world that while the continent is seeking external help, it is implementing programmes that leverage its own resources to finance the continent’s post-recovery efforts.
Africa50 is an infrastructure investment platform that contributes to Africa’s growth by developing and investing in bankable projects, catalysing public sector capital, and mobilizing private sector funding, with differentiated financial returns and impact.
It currently has 32 shareholders, comprising 29 African countries, the African Development Bank, the Central Bank of West African States and Bank Al-Maghrib.
