SMALL-SCALE building contractors belonging to the Zimbabwe Building Contractors Association (ZBCA) say they should also be included in the Reserve Bank of Zimbabwe’s 30% public sector program
me for them to satisfy the soaring demand for houses.
ZBCA president George Utamire this week said the association was riled by the fact that it had not been included in the RBZ facility meant to help struggling industrial sectors.
He said the small-scale building sector was facing numerous problems because they could not secure projects scattered countrywide as they were being snapped up by prominent organisations.
In his monetary policy statement in December last year RBZ governor Gideon Gono advised that a concessionary finance at a maximum all-inclusive interest rate of 30% would apply to all productive and export sectors.
Under the facility, statutory reserves contributed by financial institutions were made available to commercial and merchant banks for onlending on a revolving basis.
Eligible productive sectors included agriculture, mining, manufacturing, construction, transport, communication and tourism.
Construction companies and building contractors and registered members of the Construction Industry Federation of Zimbabwe (Cifoz) qualified.
Cifoz members are mainly large-scale developers in the country.
It did not, however, cater for the ZBCA whose membership are mainly small-scale indigenous entrepreneurs. There have been recommendations that the ZBCA and Cifoz should merge but the talks failed because members felt the size of projects handled was too different.
They said Cifoz members handled large commercial projects while ZBCA members handled small houses mainly in high density suburbs.
Utamire said the decision to overlook his association was hampering progress and the RBZ needed to rethink on this.
Meanwhile Gono recently read the riot act on real estate agencies and property owners saying the central bank was gravely concerned about their “unscrupulous increases” in rentals.
However Real Estate Industry of Zimbabwe (REIZ) president Abraham Sadomba in an interview defended his members, saying they were charging inflation-related rates.
In his monetary policy statement review Gono said the law would move in on the property sector because things were now getting out of hand.
“As monetary authorities, we are gravely concerned about the prevalent unscrupulous increases in rentals by real estate agencies and property owners, which are completely unrelated to any changes in economic fundamentals,” Gono said.
Estate agents have been asking government to encourage the pegging of properties in foreign currency to hedge landlords against hyperinflation.
This follows the RBZ’s threats to deal with individuals and agents requesting foreign currency for property purchases and rentals.
Seeff Zimbabwe (Pvt) Ltd managing director Nicholas Masaya has pointed out that pegging in foreign currency ensured that landlords received “value for their money” for their properties. He said it was becoming extremely difficult for landlords to strike the right price for their properties because of hyperinflation.
Annually, inflation, which peaked at 622,8% in January this year, reduced to 602,5% in February and further decelerated to 583,7% in March It stands at 505%.
Former RBZ governor Leonard Tsumba, in a letter to estate agents, allowed landlords to peg their properties in foreign currency but to actually charge in Zimbabwe dollars. When Gono took over as governor he overturned the decision, saying this was illegal and all properties should be pegged and charged in the local currency only.