It is a big bill.
How would it be funded?
Mashakada says MDC-T would use its “international goodwill” to float infrastructure Eurobonds in deep capital markets”.
However, the MDC-T policy makers will need to look at the carnage elsewhere in Africa, where countries that floated Eurobonds are defaulting and running to the IMF for help.
The Eurobond was in fashion when commodity prices, which made them an attraction, were booming.
Now that commodities are in trouble, investors have lost their appetite for risk.
Yields are rising, exchange rates weaker, meaning countries have to pay more to service debts.
Ghana has had to approach the IMF for help and Mozambique this year became the first country to default on the bonds.
Zambia had a hugely successful Eurobond float in 2012 – bids were over 15 times the offer – but low copper prices have left them in trouble.
Zimbabwe’s credit rating makes the Eurobond route improbable, even with “goodwill”.
Using a sovereign credit risk model based on budget deficits, foreign reserves, non-performing bank loans and political instability to calculate default probabilities, Bloomberg recently flagged four countries as risky African Eurobond issuers: Senegal, Tunisia, Ghana and Zambia.
How would Zimbabwe, with his messy deficits, non-existent foreign reserves, and high default rate do on that score?
Africa has seen a slowdown in investment growth from nearly 8 percent in 2014 to 0.6 percent in 2015.
Any party that relies almost entirely on FDI for its policy needs to understand that the world has changed.
The MDC-T is right that it would enjoy more international goodwill than the current ZANU-PF government, whose economic management has been a lesson in how to ruin an economy.
It is expected that all politicians come bearing promises of milk and honey.
However, MDC-T needs to be careful not to raise expectations of an overnight economic turnaround.
It sounds good on a rally podium, but recovery will not be as easy, or as fast, as claimed.
A claim of a $100 billion economy, in either 100 days or five years, is not only mathematically impossible, it is also irresponsible for a party that promises a change from four decades of Zanu-PF’s lofty, broken promises.-The Source