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New advisory firm taps into diaspora capital

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BARD Santner Markets Inc, a new Harare-based international banking and finance advisory firm, has come up with a plan to tap into diaspora investment capital seeking new opportunities in promising markets like Zimbabwe.

Bard will help Zimbabweans unlock value in their assets most of them constituting dead capital outside the country and access new lines of credit.

The dead capital is mainly tied in immovable properties like houses and buildings which Zimbabweans own outside the country, but are not leveraging to raise capital to invest there and back home.

The new lines of credit the advisory firm has arranged are the in the form of offshore transaction-based funding which does not need individuals or companies to be clients of financial institutions providing the money. Bard will arranges transaction-based deals and associated funding.

The Harare-based company is led by a local business consortium which includes  Senziwani Sikhosana, Tatenda Hungwe (pictured), Alfred Mthimkhulu and international finance expert Vinod Bussawah from Mauritius.

It has already started trading and work at its new offices in Harare’s central business district.

Sikhosana and Bussawah worked for various banks in Zimbabwe and Mauritius respectively, while Hungwe and Mthimkhulu are experts in wealth management and economic issues.

Hungwe, Bard executive director, said securitising internationally-held assets is critical as it would allow capital-seeking individuals and corporates to borrow offshore in markets where the macro-economic fundamentals, especially interest rates, are stable and repayment terms favourable.

In a media briefing today, Hungwe said his company will capitalise on Zimbabwe’s diaspora policy and cabinet’s resolution last week to energetically mobilise offshore investment capital and pursue different models of utilising the huge pool of funds Zimbabweans outside the country are sitting on.

Zimbabwe’s diaspora remittances jumped from about US$$1 billion in 2020 to US$1.4 billion last year as the country reached a record high foreign currency inflow of US$9.7 billion.

“The diaspora market and remittances are huge and need to be leveraged. Last year remittances reached US$1.4 billion, up from US$1 billion. The Reserve Bank of Zimbabwe indicated that for the first time in over 10 years, our foreign currency earnings totalled US$9.7 billion in 2021, up from US$6.3 billion in 2020,” Hungwe said.

“So we had 53% increase in our foreign currency inflows. Out of the US$9.7bn, US$6.2bn came from exports; US1.4bn from remittances. This means our foreign currency inflows are around US$10bn.  

‘In line with government’s diaspora policy and cabinet’s resolution last week of creating a diaspora-friendly environment, Bard has come up with models and mechanisms of making it easier for Zimbabweans outside to invest back home and unlock value of assets they already own.”

Hungwe said Bard is bringing in innovative ways to leverage diaspora investment capital and remittances.

“There are two key observations to make in efforts to harness diaspora remittances and networks for economic development. The first is to unlock value in assets already owned and the second is on investing regular savings or remittances,” he said.

“With regards to the first, Bard has created international banking relationships that allow Zimbabweans to securitise assets that they already own regionally and abroad. The international banking networks we have created unlock dead capital in the form of property and other assets for investment purposes.  

“On the second option, the country has indeed seen a surge in diaspora remittances. This is a good thing, but we are also aware of the fact that there are no clear conduits for harnessing these inflows for collective capital investment be it locally and regionally. Leveraging on our diversified financial market, we are coming up with investment instruments some of which could be publicly traded in our capital markets. This will boost transparency and trust in our capital markets thus improve the country’s risk profile. 

“Diasporas already understand country risk and we see them as providing essential capital on which other foreign investors can then add on to.” 

Cabinet last week received a presentation from the Foreign Affairs and International Trade minister Frederick Shava on proposed strategies to engage Zimbabweans in the diaspora so that they can remit and invest more money back home.

Government said diasporas would get industrial shells and land for the construction of hospitals and industrial parks. This will also apply to other sectors of the economy.

To facilitate this, cabinet formed an inter-ministerial committee chaired by Shava and deputised by Finance minister Mthuli Ncube. The committee is mandated to review the 2016 National Diaspora Policy.

Zimbabwe’s National Diaspora Policy provides a framework to formally mainstream the diaspora into national development plans and processes. It aims to develop measures to enhance protection of Zimbabweans abroad, and establish mechanisms for the transfer and repatriation of terminal, pension, and social security benefits for retired returnees through conclusion of bilateral labour agreements with host countries.

The action plan comprises of eight priority areas that relate to policies and legislation, the intra-governmental-diaspora relationship, institutional engagement, diaspora investment, remittances, national socio-economic development, knowing the diaspora and diaspora’s rights.

It recognises that beyond the remittances from abroad, the diaspora presents social, economic, intellectual and political capital, a pool of knowledge and expertise which must be harnessed for the benefit of the country.

Hungwe said government’s diaspora policy presents a huge opportunity for his company and Zimbabwean individuals and corporates.

Cabinet said last week the creation of a diaspora-friendly environment, comprehensive policy and strategies will unlock and promote investments by diasporas, knowledge and skills transfer; direct investment; and development.

The cabinet inter-ministerial committee will have sector-specific sub-committees to deal with particular matters relating to different spheres of the economy, policy and investment issues.

“As Bard, we want to be part of these government processes and policy initiatives so that we can help Zimbabweans in diaspora, working with those at home, to unlock value and maximise benefits from their remittances, savings and investment capital. We need to create the right frameworks and models to leverage the diaspora pool of funds for investment and development purposes. The is a great opportunity for everyone.”–STAFF WRITER

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