CABINET’s move last week to block the National Railways of Zimbabwe (NRZ)’s US$400 million recapitalisation project shows the country is not open for business.
What particularly makes this damning is that government also previously thwarted other huge investment proposals, largely because of policy failures, lack of capacity, internal rivalries, personal interests, greed and corruption.
Even if the Diaspora Infrastructure Development Group/Transnet consortium, which won the tender ahead of 81 other bidders, has shown proof of funding and answered a series of questions on critical details, political squabbles rooted in Zanu PF factionalism and succession, as well as personal agendas shipwrecked the NRZ project.
Some ministers with personal grievances, such as former Transport minister Obert Mpofu, whose DBSA-NRZ proposal was also previously rejected, were vocal in cabinet against the new project.
Yet others who have not even read the proposal simply took their cue from colleagues and what President Robert Mugabe and his deputy Emmerson Mnangagwa said in cabinet. But their role should be making meaningful contributions based on information, knowledge and analysis, not to follow the direction the wind blows.
While some ministers have legitimate concerns about the structure and terms of the deal, as well as benefits to the country, some are just driven by personal interests, greed and corruption.
Even though it might have flaws, the NRZ project was sunk largely because of certain individual ministers’ fight to financially benefit. In an environment like this, factionalism becomes the expedient pretext and the trigger to kill projects, where some would have wanted to corruptly benefit. Digging just a bit deeper in this case shows some minsters are fighting for their interests and those of their cronies who want to be involved. In this case, there is a consortium fighting behind the scenes in Harare and Johannesburg to destroy the NRZ deal as it wants to muscle in. It has even gone to the ridiculous yet alarming lengths of approaching Transnet and the South African government to lobby against the deal. One Zimbabwean vice-president has also done that.
This proves that personal interests and agendas are at work. Greed and corruption are blocking the project. In the process, this undermines the ease of doing business, infrastructure development, economic recovery, employment creation and social revival in Zimbabwe. Given that NRZ sits at the nerve centre of the economy and thus a major economic enabler, its revival would trigger Zimbabwe’s recovery from 17 years of decline. The same applies to the US$750 million Essar deal. The country would be moving in the right direction if it was implemented. However, it was blocked partly because of greedy ministers fighting to get into the feeding trough.
In this week’s edition we report that officially approved investment projects more than doubled to nearly US$1 billion this year from US$451 million last year, although the majority have not taken off.
Empirical research shows foreign direct investment inflows to Africa are largely determined by economic growth, trade openness, domestic investment, human capital and infrastructure development. Corruption is badly costing the nation investment and its benefits.
Mugabe must not allow such rot in cabinet.