Limited options for Bulawayo revival

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THERE are very few options for the economic revival of Bulawayo after President Robert Mugabe advised residents to seek economic salvation from outgoing Prime Minister Morgan Tsvangirai and his MDC-T who control the city, analysts have said.

Report by Gamma Mudarikiri

Mugabe told thousands of mourners at the burial of National Railways of Zimbabwe general manager Mike Karakadzai last Sunday that Bulawayo and Harare must not look up to his government for service delivery.

This has been described by critics as a veiled threat not to prioritise the city’s revival following a decade of de-industrialisation. Several firms have in the past decade relocated to Harare, citing perennial water shortages and the general harsh economic environment.

In the run-up to the July 31 polls, Mugabe promised to revive Bulawayo upon his re-election.

But his apparent climbdown last Sunday sent jitters and uncertainty among industrialists, businesses and commerce in Bulawayo and Matabeleland.

Executives and analysts that spoke to Southern Eye said the city had few options of turning its economic fortunes around if Mugabe dished Bulawayo.

There are fears the new Mugabe administration would let Bulawayo collapse, due to his utterances at the burial of Karakadzai.

The city had pinned hopes of economic revival and growth on the new Mugabe administration until his latest outburst.

Analysts pointed out that apart from Mugabe’s utterances, the arbitrary cancellation of council debts by Mugabe has already prejudiced the city which is saddled with huge debts.

Critics say Mugabe’s statements threatening to dump Bulawayo for not voting for him in the last election further spelled doom.

Following the Zanu PF directive that the council should cancel residents’ debts dating back to four years ago, residents have been reluctant to pay their bills, further throwing the council deeper into the red.

“Bulawayo is already prejudiced and in the short-to-medium term we will witness a drastic drop in service delivery,” economic analyst John Robertson, said. “Local authorities are already struggling to meet costs.”

Robertson expects more companies to go under if the new government continued with the indigenisation policy without modification.

The indigenisation law compels foreign-owned firms to cede 51% of their shareholding to locals. Robertson said is will scare away investment which the city is in desperate need for to it recover.

Bulawayo industries need an estimated $73 million in the short-to-medium term to recapitalise. Industry is battling with low capitalisation, high labour and operational costs coupled with limited lines of credit against huge cumulative debts.

Bulawayo Business Arise administrator George Mukamba said it would be ill-advised for Mugabe to totally ignore the city.

“Bulawayo cannot be left out of the equation of growing a sustainable economy which Mugabe aims to do in the next five years,” Mukamba said.

He, however, said the city had limited options if the new administration forged ahead and ignored Bualwayo.

Mukamba is of the view that Bulawayo should be declared a specialised industrial zone to attract investment and thus spur industrial growth.

“Bulawayo must leverage on the infrastructure it has and the fact that it was a gateway to tourism which is expected to attract investment and consequently spur industrial growth,” he said.

According to the Confederation of Zimbabwe Industries manufacturing sector survey, industry reduced its capacity utilisation to 44% from 57% as of June this year, as it continues to face a myriad of challenges including subdued foreign direct investment and limited long-term loans.

This is further compounded by inconsistence in policy which Mukamba warned was disastrous for the economy.

Bulawayo is saddled by a plethora of challenges chief among them chronic water shortages and de-industrialisation. Analysts warn the city might be heading for the worst, with signs already showing as a the local authority in the near future is expected to fail to provide services.

This follows an order by Mugabe’s administration during the campaign period that all local authorities should cancel debts amounting to hundreds of millions of dollars residents owed.

Barely a month after the order, the Bulawayo City Council is already failing to pay its employees.

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