HomeLocal News2021 outlook bright: ZBCA

2021 outlook bright: ZBCA

THE Zimbabwe Building Contractors Association (ZBCA) elected Christopher Mawere president late last year taking over from Francis Mangwendeza. Mawere comes in at a time the construction sector is bedevilled with a number of challenges which have been worsened by the Covid-19 pandemic. Deputy group business editor Kudzai Kuwaza (KK) this week caught up with Mawere to discuss among other things his objectives during his term of office, the challenges facing the sector and the sector’s future outlook. Below are excerpts of the interview:

KK: What are your objectives after your election as President?

CM: Following my election as the President of ZBCA on the September 18, 2020, I set out the agenda for my presidency as follows;

Rebranding and repositioning of ZBCA as a key stakeholder in economic development.

Engagement of the value chain of infrastructure delivery institutions – Government, Local Government, provincial structures, NGOs, mining houses and other players.

Website development as well as Mobile Application development replicating the website.

More usage of online platforms (zoom, Microsoft teams, Google, PDF open and sign etc.)

Active lobbying, total engagement and implementation of agreed positions thus inputting strategic initiatives of national infrastructure programmes through effective stakeholder management.

Advocate for robust Public Private Partnership (PPP) framework and PPP unit within the national treasury. Advocate for all foreign investors to partner local contractors in order to build local capacity through the transfer of skills to the local contractors.

Building the capacity of local indigenous black contractors through; abolishment of bid bonds and the use of strange financial instruments such as Earnest Money Deposit (EMD) by clients and other exclusionary requirements,

Advocate for free tender documents online,

Notification to ZBCA of all tenders advertised,

Benchmarking with other regional and international Associations,

Implementation of a skills development programme that offers continuous professional development in areas such as Construction Management, Contract Management, Contract Law, Project Management, Tendering, Project Finance, PPPs and management in Covid-19 challenged environments among others,

Holding of a regional infrastructure conference and symposium to bring together regional players in the infrastructure sector value chain to share experiences and opportunities,

Endearing trust in the Association, building teamwork, and resolution of all grey areas in Association business, including review and overhaul of the association constitution to bring it up to speed with the changes that have taken place in the environment,

Grow women and youth participation in construction in line with government policy on women and youth development and participation in the national economy.

Hold workshops to equip members in environment, social and governance matters (ESG),

To follow through the Contractors Bill and ensure that it is enacted into law.

 KK: How did the sector perform in 2020?

CM: The year 2020 was a difficult year for the sector with the advent of Covid-19 in an economy already dealing with devastating impacts of climatic shocks of drought, Cyclone Idai and Cyclone Kenneth as well as sanctions. However, like everyone else the sector had to cope with the new normal. The government through the 2021 National Budget statement estimated that the economy would contract by -4,1% in 2020.

According to the same 2021 national budget statement the construction sector contracted by -13,9% in 2019 and is estimated to have contracted by -11,4 in 2020. However, it is estimated that it will grow by 7,2% in 2021.  The sector suffered weak demand in 2020 contributed in large part due to the necessary lockdown that suppressed output, productivity and capacity utilisation. The sector is labour intensive and continues to be a major source of employment opportunities for the nation. Despite the difficult operating environment, the sector was able to contribute meaningfully to the sustenance of the economy of the country.

KK: What has been the impact of Covid-19 on your operations?

CM: Covid-19 resulted in the lockdown of the global economy including that of our national economy. Reported impacts of the Covid-19 pandemic on construction projects can be summarised as follows:

Suspension of projects

Labour impact and job loss (workforce shortage)

Time and cost overruns

Financial impact due to constrained cashflows

Supply shortage or delayed material supplies due to locked down economies

Interruption of planning and scheduling

Restriction of movement and travel bans thereby compromising on-site work

Shortage of materials to support running projects and sudden fluctuation of material price due to locked down supply chains

Interruption of contractual terms (legal issues)

Uncertainty of survival among the workforce

The Association has encouraged its members to embrace online and internet-based solutions for project management. The international and government protocols for managing the pandemic are being followed. Construction managers are being encouraged to embrace these new technologies in order to better manage the situation.

KK: The major complaint has been that major national projects are given to foreign contractors. What impact has this had?

CM: The major impact of major national contracts being given to foreigners has been that:

Local indigenous companies have not been able to build their capacity due to lack of work and opportunities;

There has been no transfer of skills since the foreign contractors have not been able to subcontract local players in a meaningful way preferring to bring in their own foreign staff to do work that locals are qualified and experienced to do;

The country has lost scarce foreign exchange as the foreign contractors would normally be paid in hard currency for doing work that even local contractors could do and be paid in the local currency;

Flight of qualified and experienced construction cadres as they seek green pastures elsewhere leading to the brain drain away from the sector.

KK: What should the government do to protect local players in the sector?

CM: Government should speed up the process of enacting the Contractors Bill into law. The Bill is a joint effort between the government and the construction sector. The association is grateful to the efforts being made by the Ministry of Local Government and Public Works and National Housing and Social Amenities to ensure that the Bill is enacted into law as soon as possible. The Bill seeks to establish the Zimbabwe Construction Contractors Council of Zimbabwe whose functions of regulation; registration of local and foreign companies; discipline control; project registration and monitoring; standards control; capacity evaluation; standardisation of contract documents, codes of practice and legal contractual procedures; and the making of by-laws will go a long way towards bringing sanity to the sector as well as levelling the playing field.

KK: Has your sector benefited from the weekly foreign currency auction system?

CM: Some of our members with projects that require foreign inputs have benefited from the weekly currency auction system. The Association notes that the system has brought stability into the foreign currency market as well as into the economy as a whole and would like to commend the Reserve Bank of Zimbabwe and the government for a job well done as well as to encourage them to remain vigilant in the running of the auction system to ensure that it continues to allocate scarce foreign currency for productive purposes and not for speculation.

KK: What is the capacity utilisation of the sector?

CM: The capacity utilisation in the sector currently stands at about 30%.

KK: What is the outlook for the sector this year?

CM: The outlook for the sector in 2021 is bright despite the effects of Covid-19 that has seen the country beginning the year with a national lockdown in order to manage the effects of a second wave of the virus. The positive outlook of the Association comes in the face of the 2021 national budget that has allocated over ZW$30 billion (US$365 million) towards infrastructure and utilities, and over ZW$14 billion (US$171 million) towards housing delivery in order to address the national housing backlog that currently stands at over 2 million. The national budget also projects the sector to grow by 7,2% in 2021.

We believe this approach by the government to prioritise infrastructure development and housing development will provide work to our members who are indigenous black contractors that require government assistance in order to develop to become fully fledged big home-grown construction companies with ability to export their services into the region.

Recent Posts

Stories you will enjoy

Recommended reading