Former Zimbabwe National Chamber of Commerce (ZNCC) president, Obert Sibanda has called on financial services sector to avail long-term funding packages at affordable lending rates to drive sustainable growth of the construction sector in the country.
Acknowledging Government’s increased momentum in driving key infrastructure projects in the country, Sibanda who is also past president of the Zimbabwe Building Contractors Association (ZBCA) said there was a mismatch in terms of funding models when compared to ongoing infrastructure projects.
“I’m very optimistic in terms of the Government approach to infrastructural projects taking place countrywide, It shows that if all the planned projects are carried through, there will be a massive turn-around in the economy,” he said.
He added that all these projects are using short-term funding, which has a lot of unintended consequences and If the economy is not doing well, only short-term funding will be available and the construction sector is the first to suffer and last to recover.
“With short-term capital, it’s difficult to run a successful project, If we access long-term funding, there will be a huge turnaround in the sector and our appeal is for the sector to access long-term funding at reasonable rates,” said Sibanda.
“My view is that the Government should seriously focus on housing construction and it has the capacity to steer economic growth, as it has ripple effects into other sectors,” added Sibanda.
“For instance, the construction sector is labour intensive, meaning there will be a lot of employment and downstream benefits. Suppliers of cement, pitsand and other key requirements will be kept busy and accelerate development.
“The insurance sector would also want to insure houses that are built. The furniture sector also benefits as owners would want to furnish the property. So, the economy benefits a lot from the construction sector.”
Sibanda said due to limiting factors, only a few new infrastructural development projects were being rolled out in Bulawayo with private sector players, especially banks, renovating their structures.
He said it could be that prospective investors are seeing less value in doing business in the city.
“What is necessary is to have certain institutions or banks such as the National Building Society (NBS) that the Government is involved in to be pushed to have a deliberate effort to be involved in low-income housing construction and all cities included,” added Sibanda.
