eBusiness Weekly
Nelson Gahadza
Investments in Transport and Energy Infrastructure projects should be key priority for both government and private sector players as the two are key enablers to economic turnaround, an expert has said.
The Infrastructure Development Bank of Zimbabwe (IDBZ) chief executive Thomas Zondo Sakala (pictured right), speaking at an Old Mutual Zimbabwe Investment Summit held last week said transport and energy projects are cross cutting, hence are his key priority areas that should be invested in.
“Given the choice to choose two priority investment areas, I would say Transport and Energy. Transport is about movement, people, goods, services. Unfortunately, we don’t seem to give much attention to that.
When people get stuck in traffic jams, it’s a tax to the economy and we don’t seem to recognise that,” he said.
He said other countries in the region are making strides and there are deliberate efforts to identify bottlenecks in the system and do something about it.
“We really need to improve the flow of traffic on our roads. We talk of modernising agriculture, but for inputs and output to move, they should do that in a way that is convenient to the farmer and ensure the product is competitive,” said Sakala.
He noted that Energy is cross cutting and each economic sector is dependent upon the two sectors.
In 2019, the World Economic Forum Global Competitiveness Report ranked Zimbabwe 129 out of 149 countries in terms of quality infrastructure.
The country’s infrastructure has over the last decade faced infrastructure neglect, resulting in an infrastructure deficit.
However, currently there are various roads and energy infrastructure projects under different stages of implementation.
These include the Mbudzi roundabout interchange, widening of the Harare-Masvingo-Beitbridge Highway. On the energy sector side, the rehabilitation of Hwange Colliery is due this year while several Greenfield energy projects are being implemented at different levels.
According to Sakala, whatever the country’s ranking, what is important is to say what is the access of various social groups of various regions in the country to the various infrastructure facilities.
“For example, water and sanitation, energy, IT connectivity, roads and transport in areas that are not Harare or Bulawayo or any town,” he said.
He said because of various policy and currency challenges, everyone wants to transact in USD and mostly on the parallel market and that has created serious challenges in doing business in implementing infrastructure projects.
Sakala said of the Banks’ Bulawayo Student accommodation project; they had to deal with the threat of worker strike. The workers are demanding USD salaries when the contract says we are paying the contractor in local currency.
He indicated that in doing business, some of the country’s regulatory authorities are a bottleneck on their part.
“You actually feel how heavy the bureaucracies are and to make matters worse, you get the impression that their key concern is to make money rather than to facilitate ease of doing business and these are kind of issues making it difficult to implement infrastructure projects,” he said.
He added that even if you do your own assessment, and conclude that the project is bankable, but when you implement it, you will find that there are challenges that may result in you cancelling.
“The real challenge is to make our economy operate normally and predictably and also ensure that our institutions behave responsibly. If we tackle those challenges, our models will be implementable,” said Sakala.
He said infrastructure requires long term funding, but most financial players are focusing on projects with quick turnaround.
According to IDBZ, in support of Vision 2030, the Bank has intensified work in its primary sectors of focus, namely Water and Sanitation, Housing, Irrigation Development, Transport, and Energy (“WHITE”).
In 2021, the Bank made significant progress on projects under implementation, while the preparation of various projects towards bankability had gathered pace.
On recapitalisation initiatives, the Bank will rollout various capitalisation initiatives over the next five years, the Bank undertook a Rights Issue for $1.75 billion in the last quarter of 2021.
