HomeEconomyEconomyZim-SA water export deal: double-sided coin

Zim-SA water export deal: double-sided coin

Eben Mabunda

At a state function in Beitbridge this April, the Sallini Construction country representative Mr Steve Muza announced the firm’s  involvement in a deal between Zim and South Africa for the erection of infrastructure which among other developments will export water to SA’s northern regions, as far as Polokwane.

On the cards are plans to draw water from the Tugwi-Mukosi Dam in Masvingo while eventually another dam, twice its magnitude, will be built at the confluence of Runde and Tende rivers in southern Masvingo to boost supplies. Vital players include an Italian firm Sallini Construction, Banc ABC and several other banks.

The project is a big win for South Africa (SA), as it an initiative which its Water and Sanitation Minister Lindiwe Sisulu announced to the SA parliament in June 2020. This also goes a long way in alleviating SA’s projected 17% water deficit by 2030, with SA having proposed to purchase about 30 million m3/a of raw water from the Zim.

According to the tabled plans, a pipeline will provide fresh water to the Beitbridge residents and farmers from the surrounding areas. This would translate to agricultural economic value given over 5 million Zimbabweans are currently food insecure. Given the erratic rainfall pattern recorded over the past decade, this is a plus for the residents and communal farmers in the low-lying regions. Among beneficiaries of the projects will be Schweppes Beverages.

Minister Garwe also announced; the government had set aside US$600 million for house construction with the object of building two million houses by 2030. This serves as a merit in addressing an infrastructure gap in Zimbabwe considering the nation is gripped by a housing deficit of over 3 million units, plus the possible employment in the process.

In addition the export of water will provide foreign currency to the cash strapped Zimbabwean government whose forex reserves are in the doldrums, if any! On the flip side this presents a cause for concern as to whether the Zim government did not take the shorter end of the stick, in near-sightedness for quick economic gain without an objective assessment of the implications of the deal.

The project is crystal clear for the southern neighbour whose parliament has interrogated the plan for about a year. The same cannot be said about Zim as the gains at this point appear quite vague and half-hearted. The plan lacks transparency with no engagement at any level: parliament or public whatsoever.

While the deal is said to benefit communal farmers in the low-lying areas of Zim, no irrigation infrastructure plans to assist the farmers have been tabled yet. We have many dams in Zimbabwe but post the land reform, most farmers have failed to tap into dam waters for a lack of infrastructure. Could this be any different?

The elephant in the room; between 2019 and 2020 more than two million residents around Harare had no access to running water, as drought and breakdowns pushed the city system to failure. In 2020 water production in the City of Harare, stood at the rate of 200 megalitres per day vis a vis a daily demand of 1,200 million litres (Ml)-an 83% shortfall. Harare’s water system was first designed to serve a population of 350 000 — one-twelfth the capital’s current population (4.5million). In 2019, the then City of Harare Mayor Herbert Gomba commented that “We have to construct three new dams, to add about 840 million cubic metres.”

Bulawayo’s residents need at least 150 megalitres of water a day, but the municipality could only supply  89 megalitres as the drought took its toll between 2019 and 2020. In fact three out of  Bulawayo’s six water-supply dams dried up, compelling the municipality to introduce extreme rationing which saw most suburbs receiving water for only 12 hours over a  week.

It is a matter of fact that an urgent infrastructure upgrade is needed to solve the water challenges in Harare and other major cities like Bulawayo and Gweru, but lack of budget transparency presents a significant barrier.

In 2011, the government signed a loan of $144m from the China Export-Import (Exim) Bank to upgrade the water infrastructure. In 2016, the Zimbabwean government signed a contract with a Chinese contractor Sinohydro to construct a dam northeast of the capital Harare. The project which was estimated to cost US$850-900 million never materialized.

Mabunda is an analyst and TV anchor at Equity Axis, a leading financial research firm in Zimbabwe. — ebenm@equityaxis

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