characterised by a debilitating liquidity crunch, acute foreign currency shortage, low production, dwindling investment and runaway inflation that has surpassed the 500% mark (year-on-year) — has crippled business operations in the country. This has been worsened by the Covid-19 pandemic which has infected and killed thousands of people worldwide. The construction sector has not been spared. Business reporter Kudzai Kuwaza (KK) this week caught up with the Zimbabwe Building Contractors Association senior vice-president Gerald Chipumha (GC, pictured) to discuss various issues, including currency volatility, which has severely weakened the Zimbabwean dollar, the Contractors’ Bill and the coronavirus scourge. Below are excerpts of the interview:
KK: How has the sector performed in the first quarter of 2020?
GC: It has obviously been a bit of a false start to the year 2020 for our construction sector. Following up from the last quarter of 2019, we saw tenders for the rehabilitation of 100km on the Harare-Beitbridge highway being awarded to five local companies which brought about huge excitement for all the local contractors as most of the lucrative projects had been awarded to foreign contractors over the years. The five companies awarded the 20-kilometre projects were expecting to hit the ground running after the 2019 shutdown as this project was promising to be a hive of activity with the intensity required in executing this work.
Unfortunately, this was not to be as the contract sums were quickly eroded by the hyper-inflation being pushed by the devaluation of the RTGS dollar both on the interbank and parallel markets. With such huge contracts being awarded in the RTGS dollar, the contractors are having difficulties accessing foreign currency to avail the machinery and spares required, which are all imported.
However, quite a bit of the work, mainly to the detours, took off to a good start with each contractor having completed the clearing of the first five kilometres of each stretch. The works have, however, literally hit a huge snag as the contractors are still awaiting their first certification for the first chunk of works in order to expedite the purchases of fuel and other resources to keep the work going.
KK: What has been the impact on the construction sector of Statutory Instrument (SI) 142 of 2019 which outlawed the multi-currency system?
GC: There was some confusion prior to the pronouncement of SI 142 of 2019 when the government initially announced that all contracts awarded prior to the pronouncement would be paid at the prevailing interbank exchange rate. The pronouncement had brought great relief to most contractors who were struggling to move back to site as most work had come to a halt.
Unfortunately, soon after this sigh of relief, SI 142 of 2019 was announced and brought further chaos to the construction sector as all projects ground to a halt. Most government departments had to seek budget approvals to meet the cost variations of which up to now most funds have not been made available and projects been put on hold since then.
KK: Has there been progress on the enactment of the Contractors’ Bill?
GC: The record-breaking Construction Bill has probably outlived the careers of most politicians since its initial draft having been crafted in 1998. A bit of the background is that the Bill was initially submitted to the Ministry of Public Works and National Housing for input and approval in 1999 and further submitted to the Attorney-General’s Office in 2002.
It is still unclear how the Bill has sat on the backburner for this long with numerous lobbying attempts having been made over the years by both the Zimbabwe Building Contractors Association and the Construction Industry Federation of Zimbabwe. We are however glad that we then made traction again in 2018 when the current Minister of the then Local Government Public Works and National Housing July Moyo promised to introduce the Bill in parliament by December 2018.
Although this did not happen, he has since facilitated meetings with his legal team to sanitise the grey areas, which has since been done. With the formation of the Ministry of Housing and Social Amenities, the incoming minister, Honourable (Daniel) Garwe, has since promised to push for it to make sure that it reaches parliament by the end of this year.
With all the other professional bodies within the built environment having Acts of Parliament to regulate their professions such as the architects, engineers, quantity surveyors, real estate practitioners and land surveyors, it is paramount that the Construction Bill sees the light of day as it will allow for self-regulation in the construction industry which will allow for better industry standards, development of codes of professional ethics and uncapped innovation.
KK: What in your view needs to be done to improve operations in the construction sector?
GC: In all the strategic sessions that we have had and through member engagements, it is crystal clear that the number one intervention to improve operations in the construction sector is to introduce the Construction Bill as this will bring sanity to the industry. A self-regulating mechanism will definitely improve the way contractors conduct themselves from a more professional approach.
