Thursday, April 29, 2010

Zim transport infrastructure dilapidated

Zimbabwe Business Media
Bulawayo, Zimbabwe

27 March 2010 - Zimbabwe's roads are more than 40 years old, the railway lines more ancient and the country's airport infrastructure badly needs to be upgraded if the transport sector is to be revamped towards a meaningful contribution to the country's stuttering attempts at economic revival.

Addressing the International Business Conference held at the Zimbabwe International Trade Fair in Bulawayo, Transport Communications and Infrastructural Development secretary Patson Mbiriri said the country's roads were long overdue for rehabilitation.

"Zimbabwean roads are over 40 years old and have outlived their usefulness. We have been patching them up but that is not working and we need a total revamp. The railway lines are even older than the roads, we now have to exercise a lot of caution on the railways where a train has to travel at 5 to 10 km per hour to avoid accidents," Mbiriri said.

He said there was need for infrastructure development partnerships with well-heeled foreign compaines because government has neither the capacity nor the financial resources to handle the projects, which include roads, railways and airport works.

He said government is netting US$1.3 million monthly from tollgates and disbursing it to the Zimbabwe National Road Authority (ZINARA) for patchworks on the roads but that is not enough.

He said the railways lines were very bad and short term rehabilitation programmes like those done in the past would only yield short term gains.

"We can rehabilitate the railways but still realise a short lifespan. This is more urgent, because at some point we will have to open up and allow other railway companies to operate," Mbiriri told the business delegates.

He said the Civil Aviation Authority of Zimbabwe (CAAZ) needs to urgently upgrade infrastructure at the country's three main airports, Harare International, Joshua Mqabuko, Victoria Falls.

"We only have US$4 million, which is enough to attend to the taxiways, Joshua Mqabuko needs a terminal building and a new tower."

The country's dilapidated transport infrastructure has been identified as a key impediment to economic revival. The roads are heavily pot-holed and have not been maintained for more than ten years. The results of a new toll-gate system which came into force on the roads last year are yet to be seen visibly on the roads.

Zimbusinessmedia 2010

Zim indigenisation law rattles German investors

Zimbabwe Business Media
Bulawayo, Zimbabwe

27 April 2010 - The German Africa Business Association (Afrika-Verein) says Zimbabwe's controversial Indigenisation and Economic Empowerment Act is making it very difficult to motivate German business to invest in Zimbabwe and forced them to adopt a wait-and-see attitude towards investing in the country.

In an interview at the just ended Zimbabwe International Trade Fair in Bulawayo, Afrika Verein representative to the Southern Africa Development Community Hienz Hoehmann said the law, which requires foreign companies to cede 51 per cent of their shareholding to indigenous Zimbabweans, is causing confusion and investor shyness among the 800 German businesses operating across Africa and those back home wishing to venture out.

"This laws is creating real confusion, and naturally, businesses that were willing to enter the Zimbabwean scene before are no longer willing to risk their way in now. We are finding it difficult to motivate German businesses to invest here. Maybe that will change but I do no think it will do so before there is clarity around this whole indigenisation business," Hohemann said.

However, Hoehmann said the business association, which facilitates business interactions and partnerships between African and Germanbusinesses, remains committed to doing business in Zimbabwe despite the contentions around indigenisation.

"Zimbabwe retains a great potential which can be built up easily. There are plenty of business opportunities whose utilization depends on the capability of the companies and the availability of a rewarding market. But for now the indigenisation law is holding investment back.

"The opinion among German business is that they don't do business where the environment is not conducive, and they do not take their investment to such destinations," Hoehmann said. Germany is one of the European Union countries which have taken the lead in criticising the
indigenisation law which has rattled local and foreign business interests alike.

Critics say the law amounts to a grab, particularly the phrase that says firms should 'cede' their shareholding to locals, which some believe implies forfeiture with the possibility of non-payment of the value of shares taken. The law has also divided the government with ZANU PF ministers defending it as necessary for local empowerment while MDC formations say the law will kill foreign direct investment.

Although the law remains deeply unpopular with local and international businesses, more than 400 companies have already complied with the government deadline for the submission of indigenisation plans to be implemented within the next five years.

Zimbusinessmedia 2010