daniel chigunwe
Economy Uncensored with Tapiwanashe Mangwiro
Zimbabwe’s infrastructure development goals hinge on the ambitious targets outlined in its 2025 Infrastructure Investment Programme, which aims to bridge the country’s significant infrastructure gap.
Central to this vision is the role of private sector participation in financing and implementing large-scale projects.
Given the country’s limited fiscal space and the growing demand for modern infrastructure, the Government has increasingly turned to public-private partnerships (PPPs) as a strategic solution.
However, while the potential for private sector engagement is immense, achieving meaningful partnerships has proven to be a complex endeavour.
The current framework for private sector involvement reflects a combination of successes and challenges.
Projects such as the Beitbridge Border Post upgrade and the Mbudzi Interchange construction underscore the private sector’s ability to deliver world-class infrastructure under clear regulatory guidelines.
Such initiatives demonstrate the efficacy of the user-pay principle, where revenue generated from tolls or service fees sustains the infrastructure while providing a return on investment for private partners. Yet, the broader adoption of such frameworks remains inconsistent.
At the heart of these challenges is the absence of a streamlined and transparent approval process for PPPs. Investors often face bureaucratic delays, opaque decision-making, and a lack of clear guarantees on returns, which erode confidence.
Compounding these issues is Zimbabwe’s macroeconomic instability, marked by currency volatility and limited access to foreign financing, which makes long-term investment riskier.
The Government’s recognition of these barriers is reflected in the 2025 Programme’s emphasis on tightening regulatory oversight, ensuring financial and technical vetting of investors and curbing speculative tendencies.
Despite these hurdles, the Government has demonstrated its commitment to fostering a conducive environment for private sector engagement.
The successful collaboration with China Rail International Group on the National Railways of Zimbabwe rehabilitation project exemplifies how bilateral agreements can help address critical infrastructure needs.
Similarly, private contractors have played pivotal roles in upgrading the Harare-Beitbridge Highway, further showcasing the transformative potential of PPPs.
To unlock the full potential of private sector participation, Zimbabwe must implement structural reforms and build investor confidence through decisive action.
Streamlining PPP approval processes by establishing a centralised unit for oversight, planning and monitoring would mitigate many current inefficiencies.
Additionally, introducing robust risk-sharing mechanisms, such as guarantees against currency devaluation or political instability, could make Zimbabwe a more attractive investment destination.
Moreover, consistency in policy is crucial. A strong legal framework that enshrines the rights and responsibilities of private partners, supported by legislative guarantees, would provide much-needed certainty.
Zimbabwe can also benefit from fostering regional partnerships to pool resources and attract funding for cross-border infrastructure projects.
For example, enhancing the North-South Corridor’s connectivity could unlock substantial economic opportunities while positioning the country as a regional trade hub.
Ultimately, private sector engagement is not merely an option but a necessity for Zimbabwe’s infrastructure development. By addressing its structural inefficiencies and leveraging successful case studies, the country has a unique opportunity to align its economic transformation goals with global best practices in infrastructure financing and delivery.
Private sector engagement in Zimbabwe’s infrastructure development can be examined through the lens of several economic theories, particularly Public Choice Theory, Transaction Cost Economics and the Theory of Externalities.
These frameworks provide insights into why public-private partnerships (PPPs) are critical for addressing Zimbabwe’s infrastructure challenges and how they can be structured effectively.
Public Choice Theory highlights the inherent inefficiencies of government-only projects due to bureaucratic inertia and misaligned incentives. PPPs mitigate these inefficiencies by leveraging private sector expertise and capital while retaining public oversight.
For example, the Beitbridge Border Post modernization illustrates how private sector involvement can deliver high-quality outcomes through performance-linked incentives, avoiding the pitfalls of underperformance common in purely public projects.
Transaction Cost Economics emphasises the importance of minimizing costs associated with coordination, contracting, and monitoring in infrastructure projects.
PPPs reduce transaction costs by clearly delineating responsibilities between the public and private sectors.
Zimbabwe’s partnership with China Rail International Group for railway rehabilitation exemplifies this principle, with private players focusing on operational efficiency while the government oversees regulatory compliance and strategic alignment.
The Theory of Externalities also underscores the necessity of private sector engagement.
Infrastructure often generates significant positive externalities, such as improved connectivity and economic growth, which the private sector can help capitalise on while internalising costs.
The Mbudzi Interchange project demonstrates how PPPs channel user fees into sustainable maintenance while ensuring that external benefits like reduced congestion and time savings are realized by the broader economy.
Together, these theories affirm that well-structured PPPs not only address Zimbabwe’s infrastructure funding gap but also optimise resource allocation, enhance project efficiency, and create long-term value for the economy.
Integrating these theoretical principles can help Zimbabwe design more effective partnerships to unlock its growth potential.
Tapiwanashe Mangwiro is a resident economist with the Business Weekly and writes this in his own capacity. @willoe_tee on twitter and Tapiwanashe Willoe Mangwiro on LinkedIn
Bongani Ndlovu