Construction industry to miss growth target

ZIMBABWE’s construction industry is expected to miss its projected 5% growth this year largely due to slow business activity and depressed capacity utilisation during the first half of 2013, an official in the sector has said.

Report by Gamma Mudarikiri

Construction Industry Federation of Zimbabwe (Cifoz) chief executive officer Annie Rukweza told Southern Eye Business yesterday that the sector recorded subdued performance in the first half of the year as government projects were few.

“We are likely to miss the 5% growth target as construction activity in the first of half of the year was very slow,” he said. “There were few government projects and as such there was less business.”

The government initiates 60% of the projects in the construction sector.

But during the first half of the year most of the projects were halted because of financial constraints and limited investments.

Information availed to this newspaper indicates that the construction and rehabilitation of roads were the major government projects during the period.

Some of the projects that have significantly contributed to the sector include the resurfacing of the Bulawayo–Harare and Bulawayo-Plumtree highways.

Rukweza said projects from private players were also slow due to the unavailability of long-term financing and limited foreign direct investment. She added that investors were now adopting a wait and see attitude due to the uncertainty surrounding the forthcoming elections.

According to Cifoz, the construction industry is operating at about 20% to 30% capacity.

Lack of huge capital inflows and major national development projects are some of the constraints cited by the stakeholders in the construction industry expected in the mid and long term period to negatively impact on the performance of the sector. The industry is also facing stiff competition from foreign players like the Chinese and South Africa, which have suffocated the industry.

Cifoz has been pushing for a Construction Industry Bill since 2011 which if successful, would result in the entity assuming the status of a statutory board.
Rukweza said the Bill was at the Attorney-General’s Office and such could not give timelines with regards to its finalisation.

Among other things the Bill, if finalised, is expected to protect the local players from foreign competition as it provides that preference be given to local companies in the awarding of tenders by the State Procurement Board.

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