Currency volatility blights infrastructure projects

Civic society and parliamentarians have expressed concern over how issues such as corruption and currency volatility have blighted national infrastructure projects that the government has embarked upon.

The issue came under the spotlight at the recently held fifth Zimbabwe Annual Debt Conference held in Harare on Thursday.

The Government has undertaken a number of projects which includes construction of roads and dams countrywide.

Transparency International Zimbabwe head of programmes Nqobani Tshabangu said the national infrastructure projects have been characterised by corruption which includes the gross inflation of prices. This, he said, meant that the government forked out more for less value.

“There is a need to ensure that there is a strategic way of dealing with corruption within the infrastructure deals,’’ Tshabangu said

A member of the Parliamentary Portfolio Committee on Budget, Finance and Economic Development, Edwin Mushoriwa said the implementation gap of these infrastructure projects has been proved to be a major challenge.

“We have made noise about the infrastructure projects but implementation is where we have had huge challenges,’’ he pointed out.

Mushoriwa said during the Kariba expansion programme which was carried out by Zimbabwe and Zambia, the costs incurred by the Zimbabwe side of the project was double the amount paid by its northern neighbours on the same project.

This, he said, pointed to the problem of the inflation of costs in infrastructure projects carried out by the country.

“The devil is in the detail of the manner in which we negotiate these deals,” he said.

Mushoriwa said the major problem with the projects carried out by Chinese contractors is that they were paid by the Government in the Zimbabwe dollar which continues to lose value.

This, he said, is worsened by the delay by the Government to pay contractors which will result in them getting paid an amount in Zimbabwe dollars which would have significantly lost value.

Mutare Central legislator Innocent Gonese told participants at the conference that the elephant in the room was the unstable exchange rate which resulted in half-baked national projects.

He said because of the rapid depreciation of the local currency, contractors usually inflated the costs of the projects they carry out to protect against being paid an amount of Zimbabwe dollars which would have significantly lost value.

“There is need to deal with the fundamentals and the rest will follow,” Gonese said.-ebusinessweekly