Finance for Development: Development of the Zimbabwean Infrastructure

1. The Development of the Zimbabwean
Infrastructure as a Development Tool
BY
NORBERT MUNGWINI

2. Background
• The Zimbabwean infrastructure investment
was increasing from 1980 -2000; the same
years were associated with the high economic
growth (World Bank, 2009). Unfortunately,
most of the infrastructure was destroyed by
the natural disaster (Cyclone Eline) in February
2000 especially the roads, bridges, dams,
telephones lines, power lines, schools
hospitals and other infrastructure.

3. IMAGE OF CYCLONE-ELLINE DISASTER
HOYA BRIDGE
www.herald.co.zw

4. Background
• The reconstruction of the destroyed
infrastructure coincides with the land invasion
which results in the pull out of many foreign
donors and also the introduction of the
sanctions (targeted sanctions) which made the
reconstruction difficult to be fully
implemented.

5. Background
• After the land invasion and the sanctions, the
economy started to struggle, the development
of the economy declines, the currency
(Zimbabwean Dollar) started to lose its power
against other currencies. The unemployment
increased which toughed the life of Zimbabwe
this result in the brain drain where people
were going to the neighbouring countries and
others were going as far as the overseas.

6. BACKGROUND
• Due to poverty, the infrastructure which was
using copper was been vandalised and they
were exported to the neighbouring countries,
the mostly affected was the rail transport
which lost all the copper electric cables from
Gweru to Harare which was being used to
power the electricity train, the copper cables
which was used for the communication by the
personnel.

7. VANDALISED NRZ EQUIPMENT
Vandalized NRZ Electricity Cables
www.fingaz.co.zw

8. BACKGROUND
• The tough economic conditions which started
in 2000-2008 mostly affected the
infrastructure since the old ones were not
been maintained and minimal new ones were
been constructed, this ended up with some
policy makers advocated for the introduction
of the toll gates on the main roads so that
they can get the revenue to maintain the
roads.

9. TOLLGATE
NTABAZINDUNA TOLL PLAZA
www.chronicle.co.zw

10. PROBLEM
• This results in country lagging behind in terms
of the infrastructure as compared to its
neighbours. Since the introduction of the toll
gates in the Zimbabwe’s main highways in
2008 there were not much improvements in
the roads except for one main road which was
resurfaced (Plumtree- Mutare highway).

11. PLUMTREE-MUTARE ROAD
RESURFACED PLUMTREE ROAD
www.chronicle.co.zw

12. PROBLEM
• Dilapidated infrastructure
• Lack of investment in adequate infrastructure
• Lack of confidence by the private sector in the
participation of the infrastructure
development
• Reduction of the government revenue
• Shortages of the infrastructure funding

13. NEED FOR PARTICIPATION
• Though the government and private sector
have different objectives but when it comes to
the infrastructure development all of them
results in a provision of tangible benefits to
the society which results in the economic
development.

14. NEED FOR PARTICIPATION
• The government involves in the infrastructure
development in order to improve the welfare
of the society through provision of essential
goods, employment creation, economic
growth and others.

15. NEED FOR PARTICIPATION
• Private sector is much concerned about the
return on their investment which is due to
policies by the government and also the
prevailing economic conditions. The main
problem of the infrastructure development is
about funding just like being faced by the
economic blue print (Zim Asset) which was
crafted by the ruling ZANU PF.

16. NEED FOR PARTICIPATION
• The problem is on the government and the
private sector, the government is facing a
problem on the revenue collection since there
are many tax loopholes in the system which
results in staff defrauding the government,
other companies or individuals are being
treated differently which makes the whole
collection exercise complicated.

17. NEED FOR PARTICIPATION
• The other challenge facing the government
revenue is on the reduction of the revenue
base caused by the closure of many
companies due to the economic challenges
facing the economy. This also results in the
bulk of the revenues being channelled to the
civil servants salaries and living nothing on the
infrastructure development.

18. NEED FOR PARTICIPATION
• The private sector is only facing a problem of
trusting the current government since before
the dollarization some companies and
individuals lost their foreign currency when
the reserve bank forced banks to surrender all
their forex which they had and also the farm
invasion.

19. SOLUTION
• There should be a close participation between
the government and the private sector in
order to meet the objective of infrastructure
development.

20. SOLUTION
• The government should allow the private
sector to play a role in the infrastructure
development through crafting favourable
investment policies which ensures the return
to their investment and also property rights
are been assured for. The private sector
should be allowed to invest in the sustainable
project were they get the favourable return.

21. SOLUTION
• Government should also improve in the
revenue collection this can be done by
improving the administration of the taxes,
educating the clients on the importance of
payment or use of their money, reducing the
leakages in the system caused by the staff and
other clients and also rewarding and training
its employees on the importance of the ethical
values.

22. SOLUTION
• The other factor is to lax the indigenisation
policy which needs a foreign investor to have
49% ownership and 51% owned by the locals.
This policy is not favourable since the locals
are not affording to partner with the
foreigners since they should contribute 51%
the whole policy is not favouring the direct
investment and it’s not being implemented
equally.