AS the Zimbabwe Building Contractors Association (ZBCA) prepares to hold a stakeholders’ meeting on June 24, 2016, a look at history may be in order. On May 11, 1966, 50 years ago, the Rhodesian Herald carried a story on public-funded works. The government of the day had been urged to reinstitute its National Development Plan (NDP) by the retiring president of the Federation of Civil Engineering Contractors (Central Africa), J. Johnston. He felt that the plan, announced the previous year, had provided the industry with a reasonable flow of work, and given contractors an insight into the future.
Tapiwa Nyandoro
Possibly due to Unilateral Declaration of Independence, during the preceding six months, when the plan had been suspended there had been a virtual shutdown in the commencement of new works and plant hire. “Only now”, he said, “are things starting to move again, and, in all fairness, I must say that despite the upset, few schemes envisaged in the NDP and programmed to commence during the present financial year (1966), have been shelved”. It was a good ending, to a good meeting.
It demonstrated excellent planning and co-ordination by, and between government and the construction industry. There are lessons for the current administration. Domestic savings and investment in infrastructure underwrites economic growth. The government’s position is central, as infrastructure is expensive and takes decades to recover investment. Sometimes it does not, but is an enabler for private capital, domestic and foreign, to invest in other quick return businesses or sectors such as services, mining, manufacturing, agriculture and tourism.
Government needs a NDP with a capital expenditure budget that it actually funds and implements. Parliament should check for this Public Sector Investment Programme (PSIP) before it passes budgets. It should comprehend the implications of the lack of the budget line to economic growth and job creation and retention.
The construction industry is a major component of economy growth, and government infrastructure products are a key component of it.
Without PSIP there is likely to be very little economic growth and job creation. ZimAsset is nothing but an agenda for sustainable socio-economic transformation. Sans budgets, it is relatively useless. It will not give an insight into the future or aid planning by contractors on the key infrastructure development agenda. It fails to give tangible support to job creation.
Though not enough, effective policies, however, can go some way towards mitigating the shortcomings of ZimAsset, as Mauritius’ economic success story has shown. The small island nation was deemed a hopeless case in the 1960s by economists. According to Finance & Development (September 2013), the prudent policies Mauritius adopted, however, fuelled its socio-economic transformation.
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Despite lacking the natural resources base that Zimbabwe enjoys, it progressed from an exporter of sugar, as its only forex earner, to a diversified middle income economy that earns revenue from tourism, textiles and finance. It did this by attracting FDI and building strong institutions, both areas Zimbabwe is weak in.
Rhodesia’s rich history in infrastructure construction cited above offers yet another example for current office holders to benchmark and emulate. The colonialists, while weak on voice and accountability, were impressively strong on government effectiveness, sound regulatory frameworks and keeping corruption suppressed. The country, which 50 years ago did not have an engineering school, now when it does, seems to have lost the skills, contractors, plant and machinery and the will to build its own dams, roads and rail infrastructure even as the few graduate engineers walk the streets, jobless.
While applauding government’s STEM programme, concern has been raised by the Engineering Council of Zimbabwe on the lack of work resulting in jobless STEM graduates. The lack of domestic savings and investment may be largely to blame. Both government consumption expenditure and household consumption, when measured against incomes are too high. FDI repellant practices and policies then make a bad situation worse.
The country has been calling in engineers and contractors from South Africa, India or China to build its infrastructure. Even its mooted new house of Parliament will be foreign-built. It has to borrow in foreign currency to finance infrastructure projects. That is not sustainable, especially when the national current account is perpetually negative.
Sustainable job creation requires a symbiotic relationship between governments and the domestic private sector. Disciplined markets, which are a necessity in large capital intensive projects, require forward planning by governments to create a predictable business environment that nurtures strong complimentary private sector reservoirs of skills and capacity (contractors) and ethical institutions such as the contractors’ federation.
The same applies in the agriculture industry. The Rhodesian Commercial Farmers Union, (CFU) worked closely with the Ministry of Agriculture and the likes of the Grain Marketing Board, the Cold Storage Commission, the Dairy Marketing Board as well as the Rhodesian Railways. The concept of value addition requires that such linkages and co-operation be seamlessly integrated into well honed value chains. Into that chain you can add quality education, cost effective utilities and healthcare. They all, under good husbandry, assist in increasing national productivity.
Infrastructure should be locally designed, preferably locally funded to some degree, and built by local contractors. Zimbabwe seems however to be content doing the exact opposite even in the simplest of projects involving aged and generic technologies.
On the policy side in Zimbabwe, FDI repellant policies abound even for capital intensive mining and modern commercial farming. Although changes are being made the pace is excruciatingly slow. Corruption, some behind a mask of nationalism, if not indeed patriotism, may be the major culprit.
l Tapiwa Nyandoro can be contacted on [email protected] or [email protected]
