Difficulties continue to delay the conclusion of Essar Africa’s investment in Ziscosteel and iron ore mining. President Mugabe is reported to be concerned over the matter and to have instructed ministers responsible to find a quick resolution to outstanding problems. One problem seems to be that some of the iron ore mining claims due to be transferred to Essar are being claimed by local individuals who are seeking to confirm their claims in the courts in Zimbabwe. Essar has been reported to be frustrated over the delays and even to be on the point of cancelling the investment. That, however, would seem unlikely to be allowed to happen, given Government’s interest in getting steel production under way again and Essar’s interest in Zimbabwe’s iron ore reserves.
It has been reported that Government has finalised a loan arrangement with a Chinese contractor for the construction of a water pipeline from the Zambezi River to Bulawayo at a cost of US$ 900 million. The Matabeleland Zambezi Water Project (MZWP) was first proposed 100 years ago but has never been implemented. The objective is to bring water from the Zambezi River to the low rainfall areas of Bulawayo and its surrounds. Successful completion of the project, the first stage of which will take four years, will have a significant impact on economic activity in the areas of agriculture, tourism, mining and manufacturing in Matabeleland.
Zimbabwe is reported to have short-listed eleven bidders for the expansion of the Hwange and Kariba South power generation plants. These two projects are expected to increase the country’s power generation capacity by 900 MW. Tenders are expected to be awarded by the end of the third quarter of the year.
The Ministry of Finance has published the “Zimbabwe Accelerated Arrears Clearance Debt and Development Strategy” (ZAADDS) through which it hopes to engage its international creditors in reducing its debt and clearing its debt arrears. Zimbabwe’s external debt is reported to be US$ 9,1 billion, or approximately 90% of estimated GDP for 2011. The country’s creditors include the World Bank, the African Development Bank and the IMF with respectively 45%, 21% and 22% of the country’s multilateral debt. US$ 3,3 billion is owed to the Paris Club, making up 85% of the country’s bilateral debt. According to the Minister of Finance, Hon Tendai Biti, the strategy includes both the adoption of traditional debt resolution initiatives and leveraging of the country’s national resources.
Government has also officially launched an Industrial Development Policy and a National Trade Policy. The draft Industrial Development Policy was published last year and places priority on development of agribusiness – comprising food and beverages, clothing and textiles, leather and footwear and wood and furniture – fertilisers and chemicals, pharmaceuticals and metals and electrical products as key industrial sectors. Growth in the manufacturing sector has been stagnating, due largely to a lack of access to capital for working capital purposes and for investment in new plant and equipment. It remains to be seen how effective any Industrial Development Policy can be, however well intentioned, unless the capital issue can be full addressed and overcome. The National Trade Policy focuses on increasing export levels – again issues of capital and competitiveness have to be addressed.
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