eBusiness Weekly
Business Writer
Zimbabwe’s construction sector is one of the few areas in the economy experiencing rapid growth and is estimated to grow by at least 25 to 30 percent this year, an industry executive has said.
According to the country’s five-year development plan, NDS1, the government committed to infrastructure development, supported by the private sector.
To date, several projects spanning various sectors such as roads, energy, mining and tourism are at different stages of implementation with the Government optimistic of achieving set targets.
Masimba Holdings chief executive, Canada Malunga, speaking on behalf of the construction sector at a business forum recently said the rapid growth has been so for the past three years.
“Government has said this year’s sector growth is about 17 percent but our estimate is 25 to 30 percent.
“The infrastructure that we are witnessing is largely driven around government focus on infrastructure development, firm and bullish mineral commodities and a fairly stable economic environment that prevailed particularly up to about the end of 2021,” he said.
He said the on-going infrastructure projects span across various sectors from mining, energy, roads and transport. In addition to that, there are many dam construction projects ongoing such as the construction of a 240 kilometer pipeline from the Gwayi-Shangani Dam to Bulawayo, Kunzvi Dam and Ziminya dam projects.
Government recently said it is satisfied with progress achieved on several road infrastructure projects and expects to maintain the momentum in 2022.
Road infrastructure projects have been among the key deliverables of the five-year economic development blueprint, the National Development Strategy 1 (NDS1), which has a strong focus on building, expanding and restoring infrastructure.
Through the NDS1 strategy, the government is targeting to increase the number of kilometers of road network converted to meet Southern Africa Transport and Communications Commission (SATCC) standards from five percent to 10 percent and to increase the number of kilometers of road network in good condition from 14 702km to 24500km by 2025.
For the national rail system, the target under the five-year development plan is to increase the proportion of track meeting set standards (Track Quality Index) from 57 percent in 2020 to 68 percent by 2025.
The local construction industry has shown the ability to undertake huge projects as demonstrated by local contractors working on the Beitbridge-Harare-Chirundu highway who have acquitted themselves well as a confirmation to the local industry’s ability to do huge projects.
The five companies contracted by the government to undertake roadworks are Masimba Holdings, Tensor Systems, Fossil Contractors, Exodus & Company and Bitumen World. The five were each allocated minimum stretches. In January 2020, the Finance minister brought some relief to the five contractors after committing “five percent of fuel excise duty” for the rehabilitation of the road.
According to Malunga, the value of construction works over the next 3 to 4 years is estimated at $3 to $4 billion largely funded by local capital.
The Construction Industry Federation of Zimbabwe (Cifoz) at a stakeholder engagement recently said that local sector players are prepared to advance the government’s infrastructure development plan with funders and technical partners ready for partnerships.
Martin Chingaira, the Cifoz president, said the local contractors have entered into various agreements with financiers, awaiting new projects.
“We are more than 100 percent ready to support the government’s infrastructure development projects. We have suppliers who are ready to give us machinery and other requirements for projects of any status,” he said.
Chingaira noted that the government should allow the foreign partners to come as partners rather than be awarded 100 percent control on the projects.
Meanwhile, Malunga indicated that the construction industry’s main issue impacting the sector is dealing with the currency conundrum.
“This is the biggest issue, and if this is not addressed has the potential to derail the construction and infrastructure development of this country,” he said.
He said at the moment, it is an absolute nightmare to price any project in local currency. “Everybody wants a stable currency for easy budgeting. We try to price in the US$, and when you are paid in local currency, that is where it ends and becomes a real problem,” said Malunga.
He noted that as a sector, what they are looking for is a currency that works as a store of value, a currency that is a unity of measurement.
“We are therefore looking for a market exchange rate, whose mechanics that we believe and we trust,” he said.
