Financial Gazette (Harare)
Shame Makoshori
22 August 2008
interview
Harare — IN 2006 the Infrastructure Development Bank of Zimbabwe (IDBZ) was thrust at the centre of developing and rehabilitating the country's infrastructure.
In this Question and Answer with the bank's head of implementation and monitoring, Wilbert Mubaiwa (WM), The Financial Gazette's Senior Business Reporter Shame Makoshori (SM) looks at the road IDBZ has travelled since taking over the mandate.
SM: Inflation is spiralling and yet IDBZ seems to be defying the economic fundamentals by soldering on with its projects. Can you outline your plans?
WM: The only way to retain value is to develop infrastructure and not to lend people money for them to build for themselves because by the time the necessary approvals are completed the money will not be able to purchase the building materials.
So we are involved in joint ventures with other partners such as the City of Harare and other private companies. For the Waneka housing project for instance, the City of Harare provided the land and we provided funds (for the project). We have built three blocks of flats; each block has 24 units. We are looking at three weeks to complete (the units) from now and they will be ready for occupation. An additional five blocks are coming up.
How long are you going to take to complete your projects, I see you are working on the Simtake housing project in Highfields and others in Gweru and Kwekwe?
We need 12 months to complete them, but because of the shortages of building materials, the Waneka project took us one-and-half years. Cement is now available in foreign currency and its price is shooting up regularly.
As a bank, we cannot purchase (cement) in foreign currency because we will be violating the law. So we have done away with the standard way of construction, we now carry out our (construction) work depending on the availability of building materials.
The biggest threat to the construction industry has turned out not to be (the availability of building) materials as before, but rather the availability of labour. That is the biggest problem in Zimbabwe at the moment because people have decided not to work. It actually makes sense to stay at home than going to work for a lot of people and this is affecting construction.
So where will you (IDBZ) go from here?
We started with the lower end of the market. We are expecting 644 (housing) units at Simtake. About 85 percent of the materials have been purchased, that's 40 percent of the work done. This is a massive project, but with the experience that we have gained (so far) we look forward to completing the project by September next year. We believe it would be a miracle to achieve this feat because of the challenges (we are facing).
But Zimbabwe is a miracle country. Our aim is to move into the middle income and high value markets. As you know the bank is still relatively new. We are still planning. There is a critical project we are carrying out with Africom. We have formed a joint venture company called Africom Continental. We are putting up a fibre optic cable link from Harare to Mutare to improve telecommunications. We are just about to reach Marondera. The joint venture also includes the NSSA (the National Social Security Authority). You will be surprised by the level of inquiries we have received from the region about the project with Africom.
Is this where your capacity can take you at the moment?
We are looking at the dualisation of the Harare-Masvingo and Harare-Mutare roads. The government has taken time to complete them so we said we are an infrastructure development bank, we will take over these roads. We are talking to the ministries that were responsible (for these projects) so that the necessary statutory changes are worked out and we can start work. But investments in roads take long to recover.
We will need to work with partners who understand this. I think there is need to educate the local financial institutions about this. That is why we have been quiet about it.
In my opinion we are at 25 percent of our potential capacity. When the economy recovers there is going to be a boom in construction and we must be prepared for that. The scope is very big.
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