Govt restructures model for major infrastructure

Finance, Economic Development and Investment Promotion Minister Professor Mthuli Ncube intends to restructure the sinking fund and expand the e-tolling system to broaden funding sources for key infrastructure development, particularly roads.

This represents a major stride towards establishing sustainable sources of revenue to finance the country’s road and infrastructure development needs.

Minister Ncube, in his 2025 national infrastructure budget, said “Sustaining the current momentum in financing and implementation of road development projects necessitates that there be credible and predictable cash flows to aid in planning and execution as well as reduce costs associated with standing time charges.”

Central to the strategy is the overhaul of the sinking fund.

Limited fiscal space, amidst growing infrastructure demands, requires a remodeling of the financing mechanisms.

As such, the Treasury chief will also review the Road Fund disbursement modalities, ring-fence incremental toll collections, vehicle license fees, and dedicate excess transit fees and fuel levies to the sinking fund.

“Implementation of the above measures is projected to mobilise additional resources into the Sinking Fund, which will not only greatly assist in the financing of our priority road infrastructure projects but also improve the bankability of our road projects by providing credible and dedicated income streams for private sector financing through PPPs and loan financing.”

The restructured funding strategy will underpin key project financing, including the completion of the Harare-Beitbridge highway, the 80 kilometre Harare-Chirundu road, and the Beitbridge-Bulawayo-Victoria Falls road.

These projects, the Minister highlighted, are vital for catalysing economic growth, enhancing Zimbabwe’s competitiveness, and promoting regional and international trade.

Economic analyst Mr Tichaona Takaza hailed the sinking fund reforms as a game-changer.

“This strategy reflects a mature approach to infrastructure financing. By dedicating specific revenue streams to the Sinking Fund, the government is ensuring sustainable funding for roads while also making these projects attractive to private investors,” Mr Takaza remarked.

Economist Gladys Shumbambiri-Mutsopotsi echoed similar sentiments, emphasising the broader economic implications.

“Improved road infrastructure is a cornerstone for economic development.

“These measures not only address immediate funding gaps but also create long-term benefits by reducing logistics costs and enhancing trade routes,” she said.

Complementing the sinking fund reforms is the Government’s focus on toll gates.

Minister Ncube described tolling as a vital revenue stream for the road development programme. He outlined plans for constructing new tolling points, upgrading existing ones, and enhancing collection efficiency to reduce leakages and processing times.

“Government has identified strategic locations for construction of new tolling points as well as upgrading of existing toll points with capacity to increase revenue collection,” he stated.

During 2025, priority will be given to completing three tolling points that are at various stages of implementation, financed through the Road Fund.

He emphasised the importance of this initiative, stating that toll collections would play a critical role in meeting the high demands for resources in the road sub-sector.

Mr Takaza praised this move as a practical solution to mobilise additional funds.

“Expanding toll gate operations is a low-hanging fruit in resource mobilisation. When combined with improved collection systems, this will significantly boost revenues for road maintenance and development,” he noted.

Ms Shumbambiri-Mutsopotsi highlighted the economic and operational benefits of improved tolling infrastructure.

“Efficient toll collection systems reduce turnaround times for road users while ensuring that funds are readily available for reinvestment into the road network.

“This is a win-win for both the economy and road users,” she stated.

Both the sinking fund restructuring and tolling initiatives are designed to address the country’s pressing need for improved transport infrastructure.

The targeted roads are integral to domestic and regional connectivity, making their development a priority for economic competitiveness.

Minister Ncube’s budget demonstrates a commitment to innovative and sustainable resource mobilisation strategies, laying a strong foundation for the country’s infrastructure modernisation.

With positive endorsements from analysts and economists, these measures represent a promising path forward for the nation’s road network and its broader economic aspirations.-herald