Zimbabwe Receives US$5.32 Million Grant From AfDB For SOE Recapitalisation

The African Development Bank (AfDB) has granted Zimbabwe $5.32 million to improve the governance and accountability of State-owned entities. The grant is part of the Institutional Support for State Enterprises Reform (Isser) project, which aims to strengthen the governance and management of public entities, reduce fiscal risks, and facilitate economic recovery. The project began in August 2022 and will run until September 2026. AfDB said, in its procurement notice released last Thursday:

The government of Zimbabwe has received a grant, an amount of UA4 million (US$5,3 million) from the African Development Fund, to finance the Institutional Support for State Enterprise Reform project.

This project aims to strengthen good governance and enhancing accountability through supporting interventions regarding public administration, improved service delivery and financial management (PFM). The project will enhance Zimbabwe’s capacity to effectively translate into action and implement the existing corporate governance and PFM provisions.

The grant comes from AfDB’s African Development Fund, which supports economic and social development in 38 least-developed African countries through concessional funding for projects and technical assistance, NewsDay reported. The funds will be used to enhance accountability, improve public administration, service delivery, and financial management. The project will also support the implementation of the hybrid ownership model for State enterprises and parastatals.

Zimbabwe requires State enterprise reforms as over 100 State-owned entities are technically insolvent. Weak corporate governance, corruption, poor financial performance, and ineffective monitoring and evaluation have limited their ability to deliver services. The challenges facing these entities include outdated technology, inadequate working capital, and huge debt overhang. The AfDB grant aims to address these issues and support the recapitalisation of State entities.

The government of Zimbabwe is also considering the partial or full privatisation of State-owned enterprises as part of the reform process. The AfDB grant will contribute to strengthening governance and management practices, reducing fiscal risks, and promoting economic recovery in Zimbabwe.

More Pindula News