Source: Construction industry reels from funding constraints – NewsDay Zimbabwe January 12, 2018
The construction industry plays a critical role in the growth of the economy. Despite its significance in the economy, the sector continues to reel under critical funding constraints, as local banks impose stringent borrowing conditions against the backdrop of liquidity challenges.
By Mthandazo Nyoni
NewsDay (ND) business reporter, Mthandazo Nyoni speaks to Zimbabwe Building Contractors’ Association immediate past president, Obert Sibanda (OS), who revealed that even though the industry was currently depressed, chances of growth are there. Below are excerpts of the interview:
ND: What is the current state of the construction industry in Zimbabwe?
OS: Well, currently the industry is still operating below capacity. We don’t have a lot of projects happening, but there are expectations that new projects will come.
ND: How did the industry perform in 2017?
OS: Construction is the first to suffer if there is economic decline and also last to recover. The economy has not been performing very well, so is the industry. We need more jobs.
ND: What major challenges did the industry face in the period under review?
OS: We currently have a lot of projects but there is no funding. That is the major challenge the industry is facing. Those projects that have done well are those that have got external funding. But the problem with external funders is that they come up with terms and conditions that sometimes don’t favour the locals.
ND: What are those conditions?
OS: For instance, they might come up with their own consultancy team, import certain material from outside the country, and this is not beneficial to locals. In some instances we have seen foreign companies importing manpower because the contract would be having those provisions.
ND: What opportunities are there in the sector?
OS: Opportunities are there and plenty. What people call challenges, I normally call opportunities. There are plenty of opportunities in the construction sector. The land that is not serviced, lack of sewer and water infrastructure, all those are opportunities. What is needed is funding only.
ND: At its peak in the mid-1990s, the construction industry used to employ over50 000 people. What is the situation now?
OS: It has been very bad. I don’t have figures the at the moment, but I want to believe that they have gone down to below 15 000.
ND: The industry has of late, been struggling to contain the influx of foreigners, especially the Chinese, into the country due to the absence of a legal framework to regulate the industry. What’s happening now?
OS: I don’t hate foreigners or competition. No. I like competition but, I want to believe that foreigners should come and complement locals. As you have said that there is absence of a legal framework to regulate the industry, we have seen people coming to do jobs on their own and this is not helping our economy but the foreigners themselves. There should be a legal framework to regulate the industry. If it’s a contract, there should be a difference between a contractor and a funder. At the moment there is no legal framework to that effect.
ND: What are your expectations from the new government led by President Emmerson Mnangagwa?
OS: We believe that the new dispensation that has been building a lot of confidence both local and international will bring about positive changes in the sector. It’s that confidence that will bring in investment and infrastructural development. With this kind of confidence that is coming, we are looking forward to a bright future.