Source: ‘Construction sector depressed’ – NewsDay Zimbabwe May 5, 2016
ZIMBABWE’S construction sector remained depressed in the first quarter of the year, with a number of projects being suspended due to lack of funding, NewsDay has established.
BY MTHANDAZO NYONI
Zimbabwe Building Contractors’ Association president Obert Sibanda said in an interview that the construction industry was under siege due to economic slowdown and was operating at far below 30% of capacity.
He said even though there were big projects like the Kariba South Power Extension, local contractors were not benefiting from it.
“The industry is depressed at the moment and is operating at far much less than 30% of capacity due to slump in economic activities,” Sibanda said.
He said government needed to invest much in infrastructure development to generate employment.
“For example, if the government can do much on housing projects, different sectors of the economy would be revived,” he said.
Sibanda said local companies have got capacity to do big projects but the challenge was lack of funding. He, therefore, urged government to make funding available for the benefit of the local industry.
Local contractors have been driven out of business by Chinese firms that are behind a number of construction projects currently ongoing in the country.
The industry continues to reel under critical funding constraints as local banks impose stringent borrowing conditions against the background of liquidity challenges.
Last year, the Construction Industry Federation of Zimbabwe said lack of government and private sector contracts and the liquidity challenges were the major factors contributing to the low capacity utilisation.
It also revealed that lack of huge capital inflows and major national development projects were some of the constraints cited by stakeholders in the construction industry.
Zimbabwe has a housing backlog of over a million units.