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Midlands Correspondent
FAILURE by banks to extend mortgage finance and the liquidity crunch have contributed to low business in the construction industry in Zvishavane, a local construction mogul has said. Zvishavane Business Community chairman, Newton Basera, who is also the managing director of Newbase Construction, said due to the liquidity crunch, individuals and corporates were using their own resources to embark on capital intensive projects.
Where available, he said, the high interest rates and short-term mortgage loans by banks had dissuaded companies and individuals from accessing such loans as they are unsustainable.
“Business in the construction industry is low because of the liquidity crunch prevailing in the economy, which has been coupled by banks’ failure to extend mortgage finance to individuals for property development,” Basera said.
Interest rates for mortgage loans have been too high forcing people to opt to use their savings.
“People are conducting business using money from their savings and when the savings are exhausted, at whatever stage of development, they have no option but to stop. The only business we’re left with is the one coming from mining companies around us and from council,” he said.
Basera said the government infrastructure development programmes such as roads, dams, office buildings and construction of housing units in major urban areas, should be given to local players to boost the sector.
The country has struggled to invest in infrastructure over the past decade due to shortage of working capital. Through the National Housing Delivery Programme, the government targets to develop at least 10,000 stands in the Midlands province.
Cement manufacturer, Sino Cement Zimbabwe Company recently announced that demand for cement in the country has remained low owing to a depressed construction sector. The government estimates that the country’s housing waiting list stands at over two million.
Bongani Ndlovu
Online Reporter