Business Reporter
OLD Mutual Zimbabwe, the country’s largest insurer and financial services group, plans to scale up resource mobilisation to support increased demand for US-dollar borrowings through its banking subsidiary CABS, particularly for mining and agriculture.
In the 2022 financial year, the group extended more than US$108 million to various sectors.
Old Mutual Zimbabwe group chief executive officer Mr Samuel Matsekete said the business has developed significant partnerships with development agencies, foreign banks and is in the process of forging new relationships.
“We will continue to mobilise funds through lines of credit. If we are supported by the right policies, there is a case to harness more local resources,” said Mr Matsekete recently.
“When we talk of foreign capital and being effective and cheaper, it must be partnered with significant local capital.
“The way we harness local capital is to ensure we support formalisation of savings schemes in the pensions and insurance industry, and deposits.”
Mobilisation of resources, he said, will be the key focus of the group.
“We have partnerships with bilateral institutions being strengthened. For instance, we have US$7,5 million specifically designed to support trade, established with AfDB (African Development Bank),” he said.
The group is still optimistic about the medium- to long-term outlook for the economy.
The promising green shoots, Mr Matsekete added, are within the primary agriculture sector, supported by increasing wheat yield, favourable rainfall patterns, horticulture and other agro exports.
Last week, Government upwardly revised its economic growth target for 2023 to 6 percent, up from the previous 4 percent, “on account of the positive performance of the agriculture sector”.
The second-round crop, livestock and fisheries assessment report indicates that cereal production for the 2022/2023 season is likely to top 2,6 million tonnes against local demand of 1,8 million tonnes.
Mining is also expected to benefit from good commodity prices and continuing investments in existing mines.
Experts are similarly bullish about prospects in infrastructure development.
According to Old Mutual, lending and investment activities continued with customers within key sub-sectors of the economy.
During 2022, 39 percent of the group’s total loan book was extended to agricultural activities, and the beneficiaries included players in primary and secondary sub-sectors.
About 4,5 percent of the total loan book was also disbursed to mining companies, while significant amounts were deployed to support manufacturing and distribution.
Added Mr Matsekete: “The support to economic development through lending and investment activities is impacting foreign currency generation, substitution of imports and food security.”
The group has also been actively involved in investments in the energy sector through funding several renewable energy projects.
An estimated US$9,5 million was sunk into solar and hydro energy projects such as the Great Zimbabwe Hydropower, Kupinga Renewable Energy, Solgas, Richaw and Centragrid, which are projected to generate over 42 megawatts in power, create over 370 jobs and provide power to 39 950 homes.
According to the National Development Strategy 1, energy is a key enabler to the acceleration of the country’s modernisation and industrialisation agenda, as well as sustainable socio-economic growth.