Online Reporter
Tapiwanashe Mangwiro, Zimpapers Business Hub
THE potential US$600 million deal being negotiated between China Railway International Group (CRIG) and the National Railways of Zimbabwe (NRZ), for infrastructure rehabilitation, could transform the country into Southern Africa’s logistical nerve centre.
The agreement, which is nearing conclusion, is expected to lower transportation costs and boost the competitiveness of local businesses across key sectors of the economy.
Finance, Economic Development and Investment Promotion Minister Professor Mthuli Ncube confirmed that the negotiations with CRIG, a subsidiary of the Fortune 500-listed China Railway Group Limited (CREC), were now focused on financing structures and technical standards, with a final agreement expected within four months.
“So far, we have signed a Memorandum of Agreement, we have done a full feasibility study of the NRZ infrastructure and they know what needs to be done.
“What we have been working out are details of how to put the financing structure together so that we can move on to a potential contract to move in and rehabilitate the NRZ infrastructure,” said Prof Ncube.
“We hope that by the end of the year, we will have concluded the final agreement on what needs to be done in the next four months or so, including the financing model.
“Once you develop the NRZ infrastructure, that will lower the cost of logistics and the cost of doing business in Zimbabwe,” Prof Ncube said.
“Zimbabwe can truly become a logistics hub in the region.”
Zimbabwe’s location gives it a natural leverage as a gateway between Southern Africa’s mineral-rich hinterland and ports in Mozambique, South Africa and beyond.
However, this advantage has been blunted by the deterioration in the country’s railway system, forcing most bulk cargo, including mining ore, onto already overburdened roads.
Development economist Dr Prosper Chitambara said the project could be a turning point for improved business efficiency.
“Rail is the cheapest mode of moving bulk goods, particularly minerals, fuel and agricultural produce,” Dr Chitambara noted.
“Through reducing transport costs, we will directly improve the competitiveness of local products both regionally and internationally. The spill-over benefits include lower consumer prices and a stronger export position.”
Dr Chitambara believes the railway project dovetails with national development priorities.
“If you look at Vision 2030, competitiveness and export growth are key.
Modernising NRZ directly addresses these areas. This is why the deal must be concluded without further delays,” he said.
The modernisation will also align the rail gauge with regional standards, ensuring seamless cross-border cargo movement.
This means that mines can ship ore directly to Mozambican or South African ports without the delays in trans-shipment.
Over the past decade, mining companies have become increasingly reliant on road transport to ferry bulk minerals such as coal, chrome and platinum.
The situation has increased the strain on national road infrastructure, raising maintenance costs and causing more accidents.
Ms Tsungai Karombo, a logistics expert, said the railway upgrades were the most practical way to address the challenges.
“Mining trucks are destroying our roads because they are carrying loads that should ordinarily be on trains,” Ms Karombo explained.
“Rehabilitating NRZ will not only cut costs for industry but also save the fiscus millions of dollars annually in road repairs. It is about building efficiency into the entire logistics chain.”
She added that reliable rail services could revive long-distance freight services that once made Zimbabwe a transit hub.
“If we restore connectivity to Beira, Maputo, and Durban, cargo can move more quickly and cheaply.
“That changes the economics for exporters in mining, agriculture and manufacturing,” Ms Karombo said.
Ms Karombo added that businesses are desperate for cost relief.
“Logistics costs in Zimbabwe are among the highest in the region, sometimes accounting for 30 to 40 percent of total production costs. Bringing that down will free up capital for expansion, hiring and innovation,” she explained.
The US$600 million project is expected to spur economic activity, including engineering services and job creation.
According to the Government, the rehabilitation programme will include upgrading tracks, signalling systems, rolling stock and eventually expanding lines to new industrial and mining zones.
The total length of the Zimbabwe rail network is around 3 000-3 400 kilometres, but the functional capacity is severely limited due to aging equipment and extensive vandalism, particularly on electrified lines.
The NRZ reported in 2024 that less than a quarter of its locomotives, less than 60 percent of wagons and about 20 percent of coaches were working.
At its 1990s peak, the NRZ hauled 12 million tons of cargo annually but now manages less than three million tonnes owing to a lack of locomotives and poor maintenance of its rail infrastructure.
Economist Ms Gladys Shumbambiri-Mutsopotsi emphasised the long-term benefits.
“An efficient railway system lowers input costs for manufacturers, stimulates investment and enhances regional integration,” Ms Shumbambiri-Mutsopotsi said.
“What this deal represents is more than transport infrastructure; it is an enabler of industrialisation. Zimbabwe cannot rapidly industrialise without affordable logistics.”
She added that successful implementation would restore confidence in the country’s ability to execute large-scale projects.
“For years, we have seen deals signed but not materialising.
“If this one is delivered, it will send a strong signal to both domestic and foreign investors that Zimbabwe is serious about modernising its infrastructure base.”
Ms Shumbambiri-Mutsopotsi said the stakes are clear.
“This is not just about trains. It is about whether Zimbabwe can modernise its economy and integrate meaningfully into global value chains.
“The NRZ deal, if executed, could very well be the catalyst for that transformation.”
Indeed, scepticism lingers because in the past five years, at least five agreements to recapitalise NRZ were signed, but none materialised.
“This time, however, meetings between CRIG’s top leadership in Harare and Beijing, including CRIG chairman Mr Chen Wenjian, suggest greater commitment.
Minister Ncube stressed that the feasibility studies have already been completed and that CRIG has established an office in Harare.
“They know the Zimbabwe railway backwards,” he said.
Analysts argue that getting the financing structure right is critical and the US$600 million cost must be supported by a model that ensures both profitability for investors and affordability for users.
However, with growing trade in minerals, agriculture and manufactured goods, rail traffic volumes could sustain the investment.
The broader context is framed within the Government’s Vision 2030, which targets upper-middle-income status through industrialisation and trade. Cheap and reliable transport is a central pillar of this plan.
As Zimbabwe and China work to finalise the agreement, the spotlight will be on the final delivery.
If the project finally moves from paper to the tracks, it could reshape the cost structures of mining, agriculture and manufacturing, while positioning the country as a reliable transit corridor for the region.
After years of delays and unfulfilled promises, momentum appears to be building. A functioning railway could lower the cost of doing business, improve competitiveness and cement Zimbabwe’s role as a strategic logistics hub for Southern Africa.
