Innovative financing of public infrastructure in Zimbabwe: Status vs. potential

Abstract

The paper examines the status and future potential of innovative finance in mitigating public infrastructure financing gaps in Zimbabwe. The study is descriptive. Data were collected through 23 interviews and 32 questionnaires. Interviews were conducted with managers of government of Zimbabwe ministries and parastatal enterprises, and the results were analyzed using thematic analysis. Whilst the questionnaires were distributed to officers of government of Zimbabwe ministries and parastatal enterprises and analyzed using Stata v14. The findings revealed that Zimbabwe does not currently finance public infrastructure using conventional innovative financing instruments. However, there are innovations in the combination of conventional financing instruments such as bonds, loans, and budget appropriations to finance power (electricity) infrastructure to a limited extent. Scope and potential exist for using innovative finance once a supportive legal and regulatory framework for public private partnerships (PPP) and other innovative financing instruments is in place in Zimbabwe. Using a binary logistic regression model, the findings showed that the infrastructure sector is the only factor significantly influencing innovative infrastructure financing at the 5% significance level with p-value < 0.05. The study recommends Zimbabwe to follow the South African Public Private Partnership framework by developing provincial and municipal regulations anchored in national legislation. There is latent potential for closing the public infrastructure financing gap in Zimbabwe using innovative finance.