Use­ful PPPs vi­tal for in­fra­struc­ture devel­op­ment

THE prop­erty sec­tor is one sec­tor that has re­mained buoy­ant in­side a de­pressed macro econ­omy.

The Manica Post - - Opinion - Chigumbu Warikandwa Post Cor­re­spon­dent

THIS is largely driven by the lo­cal mar­ket’s quest for im­mov­able prop­erty and in­vest­ments by Zim­babwe’s ex­pa­tri­ate work­ers spread in the Di­as­pora.

The Zim­bab­wean econ­omy, once beaten by run­away in­fla­tion, prop­erty has proved to be a se­cure al­ter­na­tive store of value and a bank­able in­vest­ment which both firms and in­di­vid­u­als trust ahead of all else.

With this back­ground, the de­mand for prop­erty has al­ways out­stripped sup­ply as lo­cal au­thor­i­ties have for long been limp­ing far be­hind the quest for both res­i­den­tial and com­mer­cial land.

As of 2015, there was an 800 000 strong wait­ing list in all the coun­try’s mu­nic­i­pal­i­ties, and so huge was the de­mand for land that the Min­istry of Lands had to com­pul­so­rily ac­quire 28 farms from Mashona­land Cen­tral and Mashona­land East to meet the de­mand for land in Harare alone.

Ear­lier this year, ce­ment man­u­fac­turer, Pre­to­ria Port­land Ce­ment (PPC) built a state-of-the-art ce­ment fac­tory in Harare which was com­mis­sioned by Pres­i­dent Mu­gabe.

PPC is a strong pub­lic com­pany listed on the Zim­babwe Stock Ex­change. The con­fi­dence shown by the com­pany in the econ­omy dis­pels the neg­a­tive word ped­dled about Zim­babwe be­ing an un­safe in­vest­ment des­ti­na­tion and that there is hope in the Zim­bab­wean con­struc­tion in­dus­try.

The de­mand for prop­erty in Zim­babwe is a mam­moth task whose ac­com­plish­ment can­not be achieved by Gov­ern­ment alone. Smart part­ner­ships are the way to go in do­mes­tic re­source mo­bi­liza­tion to dis­charge this na­tional duty. Ef­forts made by PPC are plau­si­ble in at­tain­ing this goal.

De­liv­ery of hous­ing is an im­por­tant Gov­ern­ment de­liv­er­able to the peo­ple. Gov­ern­ment has two min­istries with the purview over hous­ing de­liv­ery, namely the Min­istry of Lo­cal Gov­ern­ment, Pub­lic Works and Na­tional Hous­ing to­gether with the Min­istry of Ru­ral Devel­op­ment, Promotion and Preservation of Na­tional Cul­ture and Her­itage.

Ef­forts made by th­ese two min­istries must be com­ple­mented by the pri­vate sec­tor to de­liver hous­ing to the peo­ple.

Old Mu­tual, through its in­vest­ment ve­hi­cle Cen­tral Africa Build­ing So­ci­ety (CABS) has de­vel­oped 2 800 low cost hous­ing units west of Budiriro. Though up­take is slow, the well built sub­urb is a good spec­i­men of pub­lic-pri­vate part­ner­ships in the devel­op­ment of so­cial ser­vices aimed at re­duc­ing poverty. CABS has an­other $6 mil­lion hous­ing project in the off­ing.

In Bulawayo, 85 per­cent of peo­ple on the hous­ing wait­ing list be­long to the low in­come bracket. This in­di­cates the need to de­velop qual­ity pro-poor hous­ing.

If the Bulawayo sit­u­a­tion is any­thing to con­sider, it en­tails that hous­ing re­mains a great need for the poor whose pro­vi­sion would im­prove their stan­dard of liv­ing con­sid­er­ably.

Rentals re­main the big­gest cost to any fam­ily, with a two-bed­room house ask­ing for any­thing above $250 in an econ­omy where av­er­age for­mal em­ploy­ers pay less than $600 per cal­en­dar month.

If 40 per­cent of dis­pos­able in­come goes to­wards hous­ing alone, such a bread­win­ner and his fam­ily would be ren­dered poor.

The set­ting up of a hous­ing devel­op­ment author­ity in the name of Ur­ban Devel­op­ment Cor­po­ra­tion (UDCorp) is a pos­i­tive Gov­ern­ment ini­tia­tive aimed at fa­cil­i­tat­ing busi­ness do­ing in the hous­ing sec­tor.

UDCorp was es­tab­lished as an in­ter­ven­tion to stop the creep­ing corruption in the cooperative hous­ing devel­op­ment schemes some of which turned bloody.

Al­ready, Gov­ern­ment has in­jected $30 mil­lion into UDCorp to ca­pac­i­tate it in its man­date in hous­ing devel­op­ment.

Gov­ern­ment’s re­solve to es­tab­lish UDCorp in re­ac­tion to the chal­lenges be­dev­il­ing hous­ing devel­op­ment is a step in the right di­rec­tion in eas­ing do­ing busi­ness in this im­por­tant sec­tor.

Lately, ease of do­ing busi­ness in Gov­ern­ment has been a strong theme driven by the Of­fice of the Pres­i­dent and Cabi­net so as to cat­alyze the econ­omy to reach its full po­ten­tial.

The prop­erty sec­tor is big money busi­ness and has the po­ten­tial to spur the econ­omy to greater heights. In­vest­ment in this sec­tor is a sure way of real­is­ing profit. Fi­nan­cial giants, banks and Old Mu­tual in­cluded have poured money in this sec­tor in var­i­ous cities across the coun­try. In Harare, there is hardly any street with­out Old Mu­tual Prop­er­ties.

Fidelity Life As­sur­ance has poured $50 mil­lion at Lang­ford Es­tate, 20km south of the Harare CBD to de­velop 9 300 res­i­den­tial stands. The three phased project is at var­i­ous stages of com­ple­tion with phase one al­ready sold out.The prop­erty gi­ant is ex­pected to reap $200 mil­lion from the in­vest­ment.

Un­der the Zim-As­set In­fra­struc­ture and Util­i­ties Clus­ter, Gov­ern­ment ex­pects to de­liver 100 000 hous­ing units.

The prop­erty mar­ket is bullish with Gov­ern­ment’s in­ten­tion to de­liver hous­ing to its 500 000 strong work force.

With UDCorp al­ready hit­ting the ground run­ning on this er­rand, the ball is now on the pri­vate sec­tor’s court to come on board on this devel­op­ment ship.

Hous­ing de­liv­ery re­mains an im­por­tant key re­sult area in fight­ing poverty; the first of the seven­teen Sus­tain­able Devel­op­ment Goals driven by the United Na­tions to be achieved be­fore 2030.

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