Mercury Asset Partners taps $USD600 million pool; plans to set up an Investment Bank for Construction Finance in Zambia
MECURY ASSET PARTNERS - MAP, a multinational financing and logistics plans to establish an Investment Bank for Construction Finance in Zambia. The logistics and investment company has amassed a pool of funds totaling $USD600million for this cause. The construction targeted will range from housing to solar projects especially at a time that renewable energy is at its peak following energy bottlenecks and the housing deficit Zambia experiences. The construction of the housing will extend to auxiliary infrastructure such as paved roads, sewer reticulation, water reticulation, electricity supply, schools, clinics, shopping malls, among others. With a growing and expanding economy Zambia’s construction agenda as per 2017 budget speech is very aggressive and accounts for about over 85% of the budget.
These revelations came to light when a Ministry of Housing and Infrastructure Development delegation led by the Minister, Mr. Ronald Chitotela dated Mercury Asset Partners group in Washington D.C.
MAP had earlier in Q3 2017 the government of Zambia signed an MoU with Mercury Asset Partners for erection of over 5,000 housing units in various locations in the country.
The Minister said Government wants to grow economic activities by opening Zambia to more foreign direct investment through infrastructure development.
Mercury Asset Partners expressed determination in partnering with the state to drive the construction agenda and that they will continue with meetings that have advanced with the National Housing Authority – NHA in this vein, Founder of Mercury Asset Partners Julie Bwalya affirmed.
Economic Note of the $USD600million construction Fund
We load the intention for the setup of a construction fund to the tune of $USD600million. However, what is key in the development is that this foreign direct investment should benefit Zambians not only from an infrastructure perspective but from an employment perspective at the Investment Bank through hiring of Zambian Investment bankers, construction workers at the building projects and from local raw material acquisition such as cement and other inputs. The nation has seen the increase in construction project numbers yet very untraceable to minimal impact on the economy generally. $USD600million has the ability to impact financial markets from a foreign exchange conversion perspective if Zambian materials will be used in addition to a multiplier effects if local supplier businesses are contracted. Zambia must now be strategizing on how a balance of payment can be narrowed through usage of construction contracts like the $USD600million in question. The nation has a chance to start to solve some of its problems such as budget deficits and widened balance of payment using local means than relying on long awaited deals with multilaterals which currently seem a mirage.
“Construction can be used to narrow balance of payment positions if raw materials are locally sourced such as cement. Priority on direct benefits must be on locals such as employments and subcontracting of local entities to carry out most works” Business Times Research note