Zimbabwe needs to come up with more enticing strategic investment incentives to accelerate its climate-proofing initiatives after suffering one of the worst climate-related droughts this year.
Strategic investments in climate proofing initiatives have become more critical following one of the worst droughts in history, which left many people food insecure while the country declared a state of national disaster.
Clemence Taderera Bwenje, chief director of business development markets and trade in the Ministry of Lands, Agriculture, Fisheries, Water and Rural Development, laid out a clear vision for incentivising investment that could simultaneously boost agricultural productivity, enhance climate resilience and spur rural industrialisation.
He said this in his presentation at the Zimbabwe Economic Development Conference which started on September 14 and ends tomorrow in Victoria Falls.
Mr Bwenje's address focused on the need to rethink and tailor investment incentives for climate-proofing projects.
"Our existing investment incentives are too generic, we need to innovate and create specialised incentives that attract both local and international investments into climate-proofing projects," he said.
He proposed that irrigable land surrounding major water bodies be declared Special Economic Zones (SEZs), a move that would attract focused investment in irrigation infrastructure.
"Through aligning SEZs with devolution goals, we can unlock the potential of our rural areas, driving development and ensuring that these investments contribute to regional economies," he explained.
In his proposal, Mr Bwenje also called for Government guarantees and national project status designation for large-scale irrigation projects.
This, he said, would provide much-needed confidence for private investors, particularly in agricultural ventures, which often face high levels of risk due to climate unpredictability.
Mr Bwenje added: "If we can provide these guarantees, the private sector will step in, reducing the burden on public funds while boosting agricultural output."
A significant aspect of the proposed incentives is the removal of the 15 percent value added tax (VAT) on critical irrigation equipment such as excavators, bulldozers, trenchers, graders, pumps and transformers.
"We must eliminate VAT on this essential equipment if we are serious about scaling up irrigation and mechanisation," he argued.
By removing the tax barriers, the Government expects private sector investment to surge, reducing dependence on grain imports and improving national food security.
Mr Bwenje further underscored that revenue lost through tax exemptions would be offset by significant long-term gains in agricultural productivity and rural development.
"The short-term revenue losses are minimal compared to the private sector investment that will flow in and the grain import bill savings we will achieve," he stated.
Beyond investment incentives, he outlined a broader proposal for increased investment aimed at climate-proofing Zimbabwe's economy.
At the core of the proposal is the creation of a National Climate Resilience Fund, which would pool resources from the Government, international finance institutions such as the Green Climate Fund and the Global Environment Facility, private sector investors and donor grants.
This fund would be dedicated to supporting a National Climate Proofing Investment Programme that focuses on infrastructure, agriculture, water management, and ecosystem conservation.
"Climate change is an ever-present threat, and we need a holistic, well-resourced approach to mitigate its impacts," Mr Bwenje stated.
The proposed programme aims to support the construction of climate-resilient roads, bridges, and buildings that can withstand extreme weather events.
In agriculture, the focus will be on irrigation, water harvesting and mechanisation to maximise the use of existing and new water bodies, boosting productivity in rural areas.
Key to this initiative is capacitating institutions responsible for infrastructure development, ensuring they have the necessary skills and resources to execute these projects.
"We need to support the institutions that are critical to infrastructure development.
Without capacity building, even the best-laid plans will fail," Mr Bwenje noted.
Additionally, the proposal calls for investing in a national research and climate monitoring network that would disseminate climate information and provide early warnings to farmers and communities.
Conservation efforts will also be enhanced, with a focus on protecting forests, wildlife reserves and national parks, as well as restoring degraded lands.
To further mobilise resources, the chief director suggested that Zimbabwe actively participates in the global carbon credit market.
"We need to leverage the carbon credit market to fund our climate-proofing initiatives," he said, explaining that revenues from carbon credits could provide a steady stream of income for further investments in climate resilience.
Mr Bwenje also proposed a review of the country's input subsidy, price support and marketing regulation systems.
The aim is to close existing loopholes and redirect resources toward climate-proofing initiatives while enhancing the competitiveness of Zimbabwe's agricultural sector.
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Another innovative suggestion was the integration of insurance products into the Government's Pfumvudza/Intwasa programme, such as Area Yield Insurance, to protect farmers against the impact of climate change.
Economist Dr Prosper Chitambara, commenting on the proposals, emphasised how such strategic investments in climate-proofing could drive rural development, a crucial element in Zimbabwe's quest to become an upper-middle-income country by 2030.
"Rural development is essential to achieving Vision 2030, by investing in irrigation, mechanisation, and climate-resilient infrastructure,we can unlock the potential of rural areas, increasing agricultural productivity, creating jobs, and reducing poverty," Dr Chitambara added.
He further explained that rural industrialisation, spurred by increased agricultural output, would contribute significantly to the broader economy.
"Once we strengthen the agricultural value chains in rural areas, we will see industries emerge, leading to sustainable growth and a more inclusive economy," he said.
With the right investment incentives and a comprehensive climate-proofing strategy, Zimbabwe has the potential to not only protect its agricultural sector but also drive rural development, bringing the country closer to achieving its Vision 2030 goals.
