EDITORIAL COMMENT: Do not let the Luddites win

EDITORIAL COMMENT: Do not let the Luddites win

EDITORIAL COMMENT: Do not let the Luddites win

Source: EDITORIAL COMMENT: Do not let the Luddites win | The Financial Gazette September 21, 2017

At $400 million, the NRZ recapitalisation deal would be one of Zimbabwe's more significant foreign direct investments

At $400 million, the NRZ recapitalisation deal would be one of Zimbabwe’s more significant foreign direct investments.

TODAY, we carry a report of how the $400 million deal to recapitalise the National Railways of Zimbabwe (NRZ) stands imperiled by feuding politicians in our government.
This does not come as a surprise to anyone familiar with this government’s dismal deal-making record.
But this does not make it any less disappointing, considering the importance of NRZ to an economy in dire need of investment, especially in infrastructure.

No sustainable economic revival is going to be possible without the restoration of the country’s decayed infrastructure.

Not too long ago, government announced plans to revive the Zimbabwe Iron and Steel Company (Zisco), in a $1 billion deal, which could rise to $2 billion, we were told, in terms of a deal with Chinese investors.
Zisco’s revival fortunes are dependent on the state of NRZ as a key mover of coal, a critical component in the steel-making process.

It therefore beggars belief that, instead of taking concomitant steps towards rehabilitating these two ailing but critical entities, government ministers are acting at cross purposes and jeopardising the NRZ’s revival.

Insulated in their own corruption and incompetence, public officials entrusted to manage the affairs of this country exhibit a bizarre sense of exceptionalism not rooted in any reality.
They do not realise that, while they bicker and seek to extract ‘facilitation fees’, there is a regional transport infrastructure play that could nullify Zimbabwe’s geostrategic potential as a hub.

To the west of Zimbabwe, Botswana is pursuing a $260 million road-rail link with Zambia, while to the east, the African Development Bank (AfDB) is putting up a long-term loan of $300 million to finance part of the cost of a railway project and the port of Nacala in Mozambique that will also benefit Malawi.
The effect of both these infrastructure projects will be to by-pass Zimbabwe.
At $400 million, the NRZ recapitalisation deal would be one of Zimbabwe’s more significant foreign direct investments, with the added dimension of being one driven by non-resident citizens who have decided to invest back home.

With its parlous FDI record, one would expect Zimbabwe’s government to do all it can to attract investment, particularly from its considerable diasporan population.
As much as $200 million in foreign currency will be injected into the economy, as part of the NRZ recapitalisation, a more than welcome infusion of forex at a time when the country’s reserves are running perilously low.

Added to all this are the thousands of NRZ jobs that will be saved and hundreds more that will be created through the rehabilitation of rail infrastructure.
It is trite that a functional NRZ has immense ripple effects on the rest of the economy.
One would think that as its forgettable performance on the economy comes under scrutiny as its five-year mandate draws to an end, the ZANU-PF government would be quite eager to score a win with a major investment.

Instead, the ruling party is showing just how incapable it is to run a modern economy.
One clear message from the unfolding NRZ saga is that Zimbabwe is not open for business, even to its citizens.
All this confirms what we have known, our government is replete with Luddites. They must not win.

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