eBusiness Weekly
Africa Moyo
Government has budgeted $1,044 billion to develop infrastructure, principally targeting key economic enablers such as energy, roads and information communication technology.
Market watchers had expressed concern at Government’s failure to budget for infrastructure development, especially following foreign investor apathy in the past two decades occasioned by policy inconsistency.
Since adoption of multiple currencies in 2009, a paltry 9 percent of national budgets that averaged $4 billion would be allocated to infrastructure development with the balance being gobbled by the civil service wage bill.
Analysts say infrastructure development is a key driver for economic transformation, hence the need for Government to ensure more resources are channelled towards the sector.
The 2019 Budget seeks to address infrastructure gaps and give support to key enablers for economic transformation, through slashing cost of doing business and being supportive of industry and commerce.
Finance and Economic Development Minister Professor Mthuli Ncube said the target is to allocate 12,6 percent of the $8,16 billion budget to infrastructure development programmes (excluding agriculture).
This would be a marginal increase from 10,2 percent of the previous year’s Budget.
Prof Ncube said given the number of infrastructure development projects, most of which are spelt out in the latest economic blueprint, the Transitional Stabilisation Programme (TSP), it was important to set aside more resources towards infrastructure projects.
He allocated $16 million to the Ministry Energy and Power Development; Transport and Infrastructural Development ($399 million); and Information Communication Technology and Cyber Security ($17,9 million).
“Focus is also being given to addressing existing and emerging infrastructure gaps, which have put the lives of the public at risk, particularly in the areas of water and sanitation ($214,5 million) and road network rehabilitation ($396,3 million).
“Government will employ a deliberate thrust to leverage and crowd in private sector participation in the financing and implementation of projects,” said Prof Ncube.
P P Ps the way to go
Government has adopted the Public-Private-Partnerships (PPPs) model for infrastructure development and other turnaround strategies for tertiary institutions into self-sustaining centres of excellence, with potential to “export” education. A number of critical initiatives have been lined up which are implementable using the PPPs model.
Some of the projects include setting up industrial parks; establishment of innovation hubs and spin-off industries; incubation of science and technology based industries; and promoting research and development for modernisation and industrialisation.
Treasury has prepared the 2019 infrastructure investment plan as part of the 2019 Budget documents package. The widening and part dualisation of the Beitbridge-Harare Highway and the Harare-Chirundu Highway and the expansion of Hwange Thermal Power Station (HPS) to add 600MW to the plant, are some of the key infrastructure projects.
While the $1,5 billion HPS expansion expansion project, which is being undertaken by Sinohydro of China has already taken off, Government is still weighing viable options for the Harare-Beitbridge Highway.
Government has resolved that about 16 local companies and local authorities through which the road passes, can immediately work on the key highway that links with the rest of the continent, while it concludes talks with top Chinese construction firm, Anhui Foreign Economic Construction Group (AFECC).
AFECC had been selected to replace Austrian firm, Geiger International, which initially won the tender in 2015.
However, after indications that Geiger was unable to raise the $1,7 billion required for the dualisation of the almost 940km highway (Beitbridge-Chirundu), Government renewed negotiations with AFECC.
But due to several changes in the economy from the time Geiger conducted a feasibility study, the negotiations with AFECC have taken longer than expected, prompting Government to engage municipalities and some companies while talks with the Chinese contractor are concluded.
President Mnangagwa this week said works have commenced on the refurbishment of the Beitbridge-Chirundu Highway.
“Finally, our construction units are on the ground, all from our domestic resources, our expertise and our will to revamp our road infrastructure,” he said.
More projects in pipeline
Other key projects include construction of the new Parliament Complex, which is being financed by the Chinese government, which began almost two weeks ago, and highly anticipated Batoka Gorge Project.
The $4,5 billion rated Batoka Gorge Power Project is a bilateral venture between Harare and Lusaka, and the 2400 MW generated would be shared equally.
Global firms, General Electric and China Power are expected to undertake the project.
Zambian Minister of Energy Mathew Nkhuwa, told his country’s media that about 2,5 million jobs would be created during and after the implementation of the project. He said 1 185 direct jobs would be created while 552 suppliers of goods and services will also indirectly create 1 070 jobs.
