adminfunding.
South Africa and other regional countries have the potential to assist us with the funds that we require to unlock value for local companies. The key, though, lies in structuring programmes that insure that companies that enter Zimbabwe on the back of funding from their countries are compelled to work with local counterparts.
Recently, I drove along the Harare-Bulawayo highway and was impressed with the marked improvement to the road due to the work being done by Infralink, a joint venture company between Zimbabwe National Road Administration and Group Five of South Africa. I also noticed that the substandard tollgate just outside Bulawayo has been replaced by a more befitting structure that is closer to those found in South Africa.
Infralink cars and related equipment seem to dominate the highway whose rehabilitation is being funded by the Development Bank of South Africa. These are the type of synergies that we are talking about. The once rugged road is steadily being turned into a smooth highway that compares to other well-maintained roads around Africa.
Our information indicates that some Zimbabwean companies are also participating in the programme while the bulk of the workforce that is employed is made up of locals.
It would, of course, be interesting to get the viewpoints of the various local companies that have participated in the programme and understand to what extent the local economy has benefited. One hopes that, assuming that the construction model has worked, as it seems to have, Group Five and DBSA will continue working with local partners in a manner that unlocks value in the local construction sector.
Indeed, despite the good work that Group Five has done, we remember that a few years back it led a spirited campaign for the total ban of asbestos from South Africa and pretty much most of the Southern African region through one of its subsidiaries known as Everite. That decision badly affected Turnall Holdings’ profitability. At the time Turnall was a major competitor to Everite.
Indirectly, the decision worsened the situation at Shabanie-Mashaba Mines as investors became jittery about injecting finances to support a sector whose major products were banned by a neighbouring country and a leading economy on the continent.
While the mines are still mothballed, Turnall is still standing and heavily involved in the construction sector through the provision of both roofing and piping solutions. That applies to many other companies in the construction business.
The expectation is that since Group Five has now come to Zimbabwe there is a realisation that good neighbourliness is good for business. Obviously, a mindset that elbows out locals will not be sustainable and won’t do much to reduce poverty in Zimbabwe and the rest of Southern Africa.
We just hope that the ways the Infralink deal has been structured can be replicated in other infrastructure developments, in particular water and sanitation
According to the Ministry of Finance, the country needs almost US$2 billion of investment per year over the next decade to rehabilitate its water and sanitation infrastructure which, in turn, would boost yearly economic growth by about 2,4 percentage points.
It is no secret that the state of water and sanitation infrastructure in Zimbabwe is dire. Many households access water from shallow, unprotected and contaminated wells because they are failing to secure water from local authorities. The sanitation situation in the majority of urban centres remains in bad state. Due to the large funding requirements for rehabilitation of both water supply and sewerage facilities, rehabilitation work has been delayed in the urban and rural areas. The mushrooming of water bottling companies indicates that there is an overwhelming demand for clean drinking water.
In the medium- to high-density suburbs where most of the population cannot afford to sink boreholes a family of five buys upward of 50 litres of water a day. If allowed to continue the current situation is a potential health disaster for Zimbabwe and Southern Africa as whole, South Africa in particular.
As such it is in the interest of all to forge win-win partnerships to manage the situation. In other words, there is an opportunity for Group Five and DBSA to work with the likes of Turnall to ensure that water and sanitation infrastructure in Zimbabwe is rehabilitated. The issue of water shortages in Bulawayo is a case in point. There is need for a pipeline to draw water from the Zambezi River to Bulawayo, which requires money.
When Buy Zimbabwe engaged Turnall Holdings chief executive officer Mr John Jere recently he indicated that if properly funded, the company has the capability to supply pipes needed to build the pipeline to supply water to Bulawayo.
That process will result in new jobs being created and a now dormant housing construction sector coming back to life.
Companies that had left would also be lured back. According to Mr Jere, amounts needed to kick start the process could be as low as US$12 million to produce the AC water pipes required for the whole of the second largest city to alleviate water problems.
Meanwhile, in last week’s article I made reference to the Buy Zimbabwe partnership with the Chamber of Mines in organising the Suppliers Forum.
The response has been overwhelming. By and large, local companies are searching for ways to do business with local mining houses, but most lack understanding and knowledge of how to get around the process.
The Suppliers Forum is essentially meant to demystify the mining sector and to create synergies between our mining houses and respective suppliers.
For now, it’s God bless and remember, Buy Zimbabwe, it’s the right thing to do.
Vandudzayi is an economist with Buy Zimbabwe. She can be contacted via email on: [email protected]
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