Construction industry not spared by effects of illegal sanctions

Judith Phiri, Business Reporter  

SANCTIONS imposed on Zimbabwe by the West have made it difficult for the construction industry to receive funding critical for retooling and development of the sector.  

The construction industry in the country can be a catalyst for growth and help shape the economic landscape. 

But ever since the Western countries imposed illegal sanctions on Zimbabwe, the sector’s development continues to stifle.  

Infrastructure is an important index used for determining economic growth in any nation. Consistent with the National Development Strategy 1 (NDS1), priority is to maintain and repair current assets, complete ongoing and stalled projects while also capacitating public entities involved in infrastructure delivery to effectively and efficiently manage the assets.  

In an interview, Construction Industry Federation of Zimbabwe (CIFOZ) president and Essar Tubes and Towers director projects, Mr Emmanuel Chimedza said the sector was failing to access funding due to sanctions.  

“The construction industry has not been spared from the effects of illegal sanctions imposed on Zimbabwe. These have forced us to be innovative and mainly use local people and resources for most construction projects. “Sanctions have affected us because for the past 20 years, most companies have failed to retool, buy new equipment and its only happening now with the support of the Government. It has had to look within the country, hence sanctions must go as they affect us directly, we can’t borrow from other countries,” said Mr Chimedza.  

He said funding was a very important issue affecting the construction industry in the country for a conducive environment, as the sector needed long term loans to cater for retooling and buying of new equipment.  

Mr Chimedza said the local financial side was mainly inclined towards short-term investment which was not very conducive for the construction industry. 

He added: “The interest rates must be lower so that its conducive enough for people in the construction industry to grow. There is a need to also look at taxation in terms of paying for value added tax. When you buy equipment, it takes a lot of time for you to bring the equipment into the country.”  

Mr Chimedza said this meant that those in the construction industry would have their finances constrained for quite a long period  (about nine to 12 months), while the moment the equipment lands at the border the Government would want their tax. Commenting on the recently ended specialised Infrastructure and Built Environment Exhibition, Africa Infrastructure and Construction Confex (AfriConfex), he said it was a platform to look at issues and challenges affecting the construction industry in the country. 

He said: “It also gave us an opportunity to look at the policy framework and see how we can assist in making sure that we have  a conducive environment which also enables the construction industry to grow.” 

Mr Chimedza said despite some of the challenges the sector was facing, they commended Government for working with the sector on a number of projects such as the Harare-Beitbridge Road.  

He said competition from other players from outside the country was also healthy.  

“Players from outside the country also bring skills which we need to learn, but we want those coming from outside to also have a portion of their projects subcontracted to local people.  

“This will allow that there be skills transfer which can assist us in doing similar projects in the future. We are happy with such a platform (AfriConfex) where we can share our issues.” 

Echoing the same sentiments Reliance Holdings chief executive officer (CEO) and past president of the Zimbabwe Building Contractors Association (ZBCA), Mr Obert Sibanda said the construction industry has also been hard hit by sanctions.  

“The construction industry is like any other industry, the first to suffer is the last to recover. Whatever happens in the economy the construction industry is the first to suffer. We get affected by anything that happens in the economy.  

“The journey has been very critical and we have had situations where we did not have funding but now, we’re looking at a situation where at least projects are being funded locally which is actually a game changer,” said Mr Sibanda.  

He said a significant number of projects that are funded by players from outside came with a lot of strings attached while most of them would want to use their own contractors instead of local ones. 

 Mr Sibanda said the AfriConfex was a platform for stakeholders to come together and identify the issues that could make the industry survive and also mobilise funding from different institutions. 

“This was a great platform for stakeholders to put their heads together, discuss and come up with funding strategies and ideas on policy change so that the industry can survive,” he said.

 The Permanent Secretary for District Development Fund (DDF) Related Infrastructure Development in the Office of the President and Cabinet, Mr Christopher Shumba said the illegal sanctions were affecting Government budgeting of State funds.  

“Sanctions that were imposed on the country make it extremely difficult for Government to budget for roads only because there are other demands across the budget lines that need attention. However, when we get sufficient funding, we work on the roads and currently we are doing what we should be doing to make sure that all the roads are maintained under the Emergency Roads Rehabilitation Programme 2 (ERRP2).” 

He said the conference that looked at the drive behind infrastructural development across the country and road development was based on Vision 2030 in which  President Mnangagwa has said no one and no place should be left behind.  

“It means we must have a network of roads that gets to each and every corner of the country. This is a network that is meant to make sure that every community has a road network that gets to it and if we’re going to talk seriously about rural development, probably our growth points and small townships there must be a network that takes people to that point,” said Mr Shumba.  

Confederation of Zimbabwe Industries (CZI) Matabeleland chapter president Mr Raymond Shoniwa said as some of their members who are manufacturers are suppliers to contractors, the sessions from the event provided them an opportunity to understand what was happening in the built environment and what contribution they could make.  

AfriConfex, a two-day event, was organised by the Zimbabwe International Trade Fair (ZITF) Company in partnership with the Ministry of Transport and Infrastructural Development.  It came at a time when the Government has embarked on several high impact infrastructural development projects aimed at achieving a middle-class economy by 2030. Running under the theme: “Solid Foundation. Stronger Future — Exploring Linkages in the Infrastructure Value Chain,” the event was primed to be the country’s biggest gathering of buyers and sellers within the entire built environment value chain, creating a single platform for knowledge sharing across the different sectors, sub-sectors and segments. 

Transport and Infrastructural Development Permanent Secretary Engineer Theodius Chinyanga said investment in large-scale infrastructure projects has been and continues to be one of the cornerstones of Zimbabwe’s NDS1, which outlines the roadmap to achieve economic growth and stability. 

He said the private sector and Government’s drive to improve the country’s infrastructure to sustain growth in the manufacturing sector and expand municipal utilities will continue to contribute to the growth in construction spending. 

Speaking on the state of the nation’s roads and development plans, Eng Chinyanga said: “There is huge potential for investment in road infrastructure development. Together we can deliver the road infrastructure that we want. Zimbabwe boasts of a road network length of some 98 049km, of which 25 034km is under DDF, 18 431km under Department of Roads, 40 205km under Rural District Councils and 11 333km under Urban Local Authorities, while 3 046km is unclassified.” ZITF board chairman Mr Busisa Moyo said it was imperative for a stand-alone exhibition outside the traditional Mine Entra where building and construction had previously been showcased. 

“The inaugural AfriConfex will, therefore, provide a key platform for the sharing of local and regional experiences, technical knowledge exchange and a discussion of cross-cutting challenges, opportunities and learnings with a view of drawing up actionable resolutions to achieve industry and economic growth,” he said. 

Mr Moyo said as indigenous contractors gear up to venture into regional and international markets, AfriConfex will provide dynamic, hands-on moments to stay ahead of trends, opportunities and risks such as technology trends, international labour markets and new legal backgrounds and regulations. 

The inaugural event will, thus, feature discussions on topical issues affecting the industry that include construction industry policies and legal framework, financing construction projects, urban and rural road infrastructure development. Key bodies in the sector that graced the event included the Zimbabwe Construction Industry Association (ZCIA), CIFOZ and ZBCA.