Zimbabwe: The Reawakening of Local Companies

12 November 2021

Lovemore Chikova Development Dialogue

A quiet revolution, but with outstanding results, is taking place in the construction industry, where local companies are claiming their rightful position by going for major projects.

And this augurs well with the vision of attaining an upper middle income economy by 2030 and provisions of the National Development Strategy 1 economic blueprint.

In fact, infrastructure development has since emerged as one of the leading factors that will help the country fulfil its vision and attain its goals.

This is because since coming into being, the Second Republic has emphasised and embarked on infrastructure development at a scale that has never been seen in the country.

Roads, dams, houses and many other infrastructure projects are being undertaken in various parts of the country.

But it happens that local companies are now starting to move out of their shells, claiming a huge chunk of such projects.

Previously, there was a tendency to turn to foreign companies for the execution of construction projects, side-lining locals who had to be content with small projects, that is if any came their way.

It appeared people were content with the status quo, although the results were far in-between, as the foreign firms struggled to do an excellent job.

The New Dispensation is changing all that and creating a new mindset that locals can actually do a better job if given an opportunity and resources are availed to them.

Many game changer projects being undertaken in the country at the moment are being undertaken by local companies, or are being carried out through partnerships between local firms and foreign ones.

By entrusting local companies with big projects, Zimbabwe is following modern trends in which locals play an important role in developing their countries.

The engagement of local firms in the construction industry is a clear testimony that President Mnangagwa means it when he, on several occasions, says: "Nyika inovakwa nevene vayo" (a country is developed by its people).

Outside help, yes, but this should be taken into consideration with what exists in the country.

Where local companies have the capacity, why not let them carry out the job, and in cases where they lack expertise, partnerships can provide the answer.

These partnerships will help capacity the local companies with knowledge and technology such that within a few years they will be able to stand on their own.

But so far, engagement of local companies has proved beyond measure that it is the solution to some of the problems that the country has been facing.

Let us take the Harare-Beitbridge Highway, for example.

The upgrading of this major highway had been on the cards for many years, but no action was being taken to kick start the work.

Even ground breaking ceremonies where picks and shovels turned over fresh ground could not just make the projects progress.

The reason for this failure can be traced to the trust of foreign companies that were being engaged to do the works.

They failed to implement the contracts they had signed and in some cases it was later discovered that the firms did not actually possess the financial backing they were claiming.

In 2016, the Government engaged Austrian firm Geiger International for the works on the Harare-Beitbridge Highway, but was soon disappointed by the firm's lack of action.

In 2018, Geiger's tender was cancelled after the Government became impatient with lack of construction activity along the country's busiest highway that links Zimbabwe, South Africa and several other countries in the north.

"In the area of infrastructure development, we need bidders for the dualisation and widening of the Beitbridge-Harare Chirundu Highway," President Mnangagwa said during his visit to China in 2018. "For two years we have had problems with Geiger, so Cabinet has taken a decision to institute a legal process to terminate the deal as a result of non-performance."

After that, Anhui Foreign Economic Construction Group was engaged, but still construction did not start.

Government then decided in 2019 to turn to local construction companies for the job, and the results have not been disappointing as they have far exceeded expectations.

Five firms -- Tensor Systems, Masimba Construction, Fossil Contractors, Exodus Company and Bitumen -- were engaged for the job and so far more than half of the nearly 580-kilometre road has been upgraded into a modern highway.

The benefits of using the local companies to upgrade the highway have been numerous.

President Mnangagwa has since indicated that the country has saved billions of dollars in hard currency by engaging the local companies to carry out infrastructural development projects not only on roads, but dams as well.

He said Government saved US$1,3 billion on the ongoing construction of the Harare-Beitbridge Highway by going for local companies.

"We are constructing roads, in the past we used to think that we couldn't do it on our own," he said while commissioning Marovanyati Dam in Buhera.

"We used to seek foreigners, but not anymore. Initially, we engaged some foreign companies to construct the Harare-Beitbridge Road and we had to pay US$1,9 billion.

"However, after some delays we kicked out those companies and hired locally. The road is going to cost US$600 million and we are saving US$1,3 billion."

Apart from saving financial resources, using local companies for construction projects has helped create employment for graduates in various fields related to road construction.

Local construction companies tend to use locally available resources for their projects, as compared to foreign companies that usually import the raw materials and other resources, including even labour.

Officials for the local companies in most cases understand the local culture, hence less conflict with communities in which they will be implementing projects.

Cultural differences and lack of respect for local culture can actually be an impediment in the successful implementation of construction projects.

Often, we have heard of some locals resisting certain projects because some rituals were not done before the commencement of works, or because the project implementers are desecrating important cultural places.

While in the past, local companies were failing to breakthrough in clinching business opportunities, the situation has changed because Government policies now favour the use of local resources and expertise in undertaking development projects.

While the big local companies are doing wonders in terms of construction works on various projects they are undertaking, it is also important that Government helps to develop small-scale contractors.

Not all projects would require the attention of the large-scale contractors, who usually like to go for big projects.

Small contractors face various problems and cannot compete with the big companies on the market.

They need to be capacitated by ensuring that opportunities to undertake projects are availed to them as a way of empowerment.

What has been happening in the construction industry clearly demonstrates that local companies have gained a competitive edge and they can perform efficiently if given an opportunity.

The New Dispensation's engagement of local companies for the big projects is in line with the drive for local empowerment.

The move shows the Government's trust in local skills, especially in the fields of engineering, architecture and surveying.

This means foreign firms should only be engaged as a last resort or in cases where locals do not have the expertise.

The best, even in such cases, would be to partner the engaged foreigners with locals for skills and technology impartation.

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