Construction sector boom to go beyond 2027

16 Jun, 2024 - 00:06 0 Views
Construction sector boom to go beyond 2027

The Sunday Mail

Business Reporter

THE construction industry is set to continue on its upward growth trajectory through 2027, bolstered by significant Government-funded infrastructure projects.

Key initiatives in dam construction, road rehabilitation and the development of the new city in Mt Hampden are projected to anchor the sustained growth, underscoring the Government’s commitment to economic development amid climate change challenges.

A report by Morgan & Co gives an optimistic outlook for Zimbabwe’s construction industry, citing it as one of the fastest-growing sectors in the economy.

The sector report says the industry will maintain robust growth over the next three years, driven by ongoing and planned key infrastructure projects.

The growth is expected to have a multiplier effect on the economy, creating jobs, stimulating related industries and fostering overall economic development.

Economist Mrs Gladys Shumbambiri-Mutsopotsi believes a major component driving the sector’s expansion are the Government’s ambitious dam and road construction projects, some of which are expected to be complete in the next three years.

“These dams are crucial for harnessing water resources in a country that faces increasing variability in rainfall patterns due to climate change. These projects seek to support agriculture and industrial activities, and provide potable water to communities, ultimately fostering resilience and sustainable development,” she said.

Road infrastructure, both trunk and non-trunk, is another critical area experiencing substantial investment.

The expansion of major roads such as the Harare-Chirundu and Harare-Nyamapanda highways, and dualisation in some sections leading into and out of major cities and towns are testament to the Government’s dedication to improving transportation networks.

Major road links such as the one between Plumtree and Mutare, via Bulawayo and Harare, have already been completed, while the Harare to Beitbridge one is almost complete, with the massive Mbudzi interchange expected to be completed by August this year. The interchange alone is expected to cost US$88 million.

What is critical to note is that the Beitbridge-Harare Highway was constructed by local companies after the Government changed from the previous practice of hiring international firms to implement major infrastructure projects.

The Beitbridge-Harare and Harare-Chirundu highways are being worked on by Bitumen World, Fossil Contractors, Exodus Company, Masimba Construction and Tensor Systems. The five companies involved in the two projects, initially estimated to cost US$2,7 billion, are collectively rehabilitating a total stretch of 935km.

These upgrades are expected to enhance connectivity, reduce travel times and lower transportation costs, thereby stimulate economic activities across the country. Improved road infrastructure is also anticipated to attract investment, boost trade and facilitate regional integration.

Adding to the transformative infrastructure developments is the construction of a new city in Mt Hampden, where local construction firms are also at the centre of the project. This ambitious project seeks to decongest the capital, Harare, and create a modern and smart urban centre equipped with state-of-the-art facilities.

The new city is expected to house Government offices, as well as residential and commercial properties, setting a new standard for urban development in Zimbabwe, in line with the modern architectural development unfolding in the world.

Ms Sharon Mahufe, another industry analyst, echoed these positive sentiments, saying: “The construction boom we are witnessing is a testament to the strategic investments being made in critical infrastructure.

“These projects not only address immediate needs but also lay the foundation for long-term sustainable growth. The benefits will be far-reaching, impacting various sectors and improving the quality of life for many Zimbabweans.”

Despite these positive developments, there are other nuanced dynamics within the construction sector.

Analyst Mr Amon Manguru pointed out that, while infrastructure projects are booming, the residential property market may face a slowdown.

“The uptake of new residential spaces is becoming sluggish due to high pricing. As a result, we might see a deceleration in the pace of residential construction going forward,” he said.

Zimbabwe’s residential property sector’s potential downturn is not driven by lack of demand, but the absence of appropriate housing schemes.

“The housing industry will not suffer due to lack of demand. Instead, the challenge lies in the lack of housing schemes that cater for the lower-middle-income to upper-middle-income segments of the economy.

“There is a significant market for affordable and appropriately priced housing in these low-income brackets. Addressing this gap with well-structured schemes could reinvigorate the residential construction sector and meet the real demand from a substantial portion of the population,” he added.

Conversely, Mr Manguru sees a promising future for the development of proper shopping malls outside Harare. Cities and towns such as Mutare, Victoria Falls, Kadoma, Bulawayo, Chinhoyi and Marondera are emerging as focal points for retail expansion.

“These areas are witnessing increased demand for modern shopping facilities, driven by growing urban populations and rising disposable incomes. The establishment of new malls in these regions is expected to cater for this demand, providing residents with enhanced retail experiences and contributing to local economic growth,” he said.

Zimbabwe’s construction industry is on a growth path, fuelled by Government-led infrastructure projects. While challenges remain in segments of the residential property market, other areas such as retail development in secondary cities show significant promise.

With continued investment and strategic planning, the sector is set to remain a key driver of economic growth in Zimbabwe through 2027 and beyond.

Other Government-initiated projects benefiting local firms include a 10km section of the Marondera-Wedza road (US$5m), which is being widened; 10km of the Beatrice-Mubaira road (US$10 million); 7km of the Wedza-Sadza Growth Point road (US$3,5 million); and 3,3km of the Mt St Mary’s-Nhekairo Chingondo road (US$1m).

Kunzvi Dam is on course for commissioning in 2026.

The US$109 million dam is the first Harare water supply reservoir that is not on the Manyame River. Additionally, it is on the opposite side of the metropolitan area, far from the Morton Jaffray Water Works and lakes Chivero and Manyame.

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