THERE is no doubt about the prodigious economic development expectation that has gripped the nation in this post-election period, and in particular, how the execution of the Zimbabwe Agenda for Sustainable Socio-Economic Transformation (Zim Asset) programme will unfold.
The major challenge undoubtedly is the funding aspect, mainly for infrastructure projects – which fall under the program’s Infrastructure and Utilities cluster. Infrastructure is the biggest enabler of, or launch pad for, economic advancement. Zim Asset’s Infrastructure and Utilities cluster has modest goals of bringing on board roads (700kms new, 500kms rehabilitated, 200kms widened and grading 4000kms of rural gravel roads), rail (400kms rehabilitated), construction of 10 dams and additional 450 MW of power (from refurbished existing facilities and new units at Hwange) among others. Viewed against constraints of the ‘devilish’ sanctions – which worsen the financing challenge, and the 5-year tenure, the goals are fair and achievable assuming a strong work ethic prevails in government.
That said, more ambitious infrastructure goals would have been desirable in light of the comparatively massive infrastructure developments that are taking place in neighbouring SADC countries. For example, South Africa, Africa’s biggest economy, is reported to be spending US$115 billion on infrastructure-related projects this year, and it expects additional 9,600MW of combined power output in 2 years from the new Kusile and Medupi power plants. Mozambique’s significant foreign direct investment from mining activities has seen new railway and habour infrastructure (new Beira terminal) being constructed among others.
After a grueling 12 years of economic doldrums, and having democratically elected a new government into power, the question Zimbabweans are asking is – what is the meaning of continued sanctions by the West (USA and UK)? As stated by government, Zim Asset is to be funded mainly by the mining sector revenue of which diamond receipts expected to constitute the lion’s share as the state, through ZMDC, is a major shareholder in diamond mining entities. As it stands, sanctions mean Zimbabwe’s diamond revenue remitted from EU cannot flow through the traditional London or New York routes as it will be blocked and confiscated.Advertisement
Whatever issues the USA and UK still have with the government or President Robert Mugabe, which to anyone who cares now clearly appear to be personal than to do with democracy, elections, governance, human, dog or cat rights or whatever lexicon one chooses. By all means, this should not be allowed to shut out Zimbabweans’ aspirations for development. It should be pointed out that there are certain entrenched narratives about Zimbabwe or President Mugabe in some Western mainstream media which lend themselves a predisposition to believe anything negative and even conspiracies, however untrue or outlandish, about this country or its president. Of course the origins can be traced to land reforms, but with engagement and dialogue, we can find each other.
Back to infrastructure; faced with the above challenges, there are always ways – innovative or unorthodox – of structuring infrastructure deals for our benefit. It remains to be seen how successful Zimbabwe will be in raising capital on the international bond market. Meanwhile, resources-for-infrastructure and or build-operate-transfer deals could prove critical in addressing the yawning infrastructure gaps that exist. We can also take a leaf from, and improve on, for example, the following reported resources-for-infrastructure deals: 2007 DRC-China US$9 billion for developing of mines in DRC and construction of railways, roads, power plants and hospitals by China. In return China would be reimbursed a stipulated value of minerals mined and sold, such as copper and cobalt; 2006 Gabon-China $3 billion for accessing iron ore reserves by China and construction of railways, ports and dams and the 2004 Angola-China $2 billion deal.
Similar deals can be structured here in Zimbabwe, probably without committing anything above 10% of, for example, our total coal reserves value in order to have modern and transformational infrastructure such as, 2,000kms of new paved (tarmac)and dualised roads, 1000kms ofnew rail or oil pipeline, 2,000MW power plant and even 20 new dams, using local workforce. Alternatively the build -operate –transfer (BOT) deals which have been suggested in the past can be modified and reconsidered. If properly structured and implemented, both types of deals can potentially give us a staggering head start on the economic development front without adding an iota of foreign debt. Contrast this with the debilitating and poverty-rendering Western-imposed sanctions and or the heaping of IMF/World Bank debts which may come with onerous conditions.
No Western nation has as yet pulled-off such mega resource-for-infrastructure deal in Africa. And as usual, once such deals are sealed, expect a volley of vitriolic and negative reports from a slew of anti-Zimbabwean government outfits. But that can be countered by deal transparency and local buy-in campaigns. The usual outcry that we will be giving away our resources for free is incorrect, misplaced and ignores the realities. Our situation is that we do not have financial capital but we have untapped resources. From such deals, we will get value (infrastructure) relatively faster and pay through minerals mined and sold, which will only be a small fraction of our total mineral reserves. And importantly, we will not add on crippling debts as the deal will essentially be a 21st century barter trade. Moreover, such deals will dovetail and provide a good mix with the Community Share Ownership Schemes (CSOS) and Zim Asset’s Infrastructure and Utilities goals.
Can China deliver on such humongous deals? For a country that has leap-frogged to world number two economic powerhouse by unleashing massive economic transformation to its population which is roughly a quarter of humanity, and at an unprecedented pace – certainly it can. China, reportedly with a majority of its leadership being engineers or people with technical backgrounds, has overtime been adding an average of 100 gigawatts (100,000 megawatts) of quality and energy efficient power plants yearly to its economy in addition to many engineering feats such as rolling out the world’s fastest bullet trains.
According to McKinsey Global Institute (MGI), China’s average incomes are growing ten times as fast as the United Kingdom’s economy did during the Industrial Revolution and with 100 times as many people. Therefore China needs resources and we need critical infrastructure– roads, rail, airports, clean water supply facilities, power plants and a share of ports(Beira)–fast – without giving away too much and or burying ourselves in foreign debt, -in order to accelerate our own economic transformation.Our local companies would thereafter spearhead such infrastructure projects.
It is no longer socially or politically tenable to continue having impediments to our aspirations for better quality living standards given the arduous economic journey we have travelled and the obtaining crippling liquidity and unemployment challenges. If sanctions remain a problem, then they must be busted with ruthless efficiency. If its corruption, perpetrators should be sent to jail, or summarily dismissed if the reason is incompetence.The mantra now is grow the economy or die. We should stand ready to support any economic development initiative by our government that is rooted in equity and inclusiveness for our prosperity.
Noel T Ngangira writes in his own capacity and can be contacted at email@example.com