More funds for infrastructure

07 Aug, 2022 - 00:08 0 Views
More funds for infrastructure

The Sunday Mail

Tapiwanashe Mangwiro

In his 2022 National Budget Statement, Finance and Economic Development Minister Professor Mthuli Ncube allocated $334,7 billion for capital projects, which includes infrastructure.

As of June 2022, a total $141,4 billion of the money had been used and the Minister pledged $172,6 billion more in the second half of the year to take the total allocation above $500 billion.

In the six months to June 2022, $8 billion was targeted at dam construction, procurement of drilling rigs and borehole drilling. Priority was on sustaining on-going works on key projects such as Gwayi-Shangani and Chivhu dams.

Gwayi-Shangani Dam costs amounted to $6,7 billion, with the project now at 67,5 percent completion while the construction of the pipeline has also commenced.

Minister Ncube said, “Overall progress at Chivhu Dam is at 98 percent with the project now earmarked for commissioning during the third quarter of 2022.”

The Government also availed resources in support of establishment costs for Kunzvi, Vungu and Ziminya dam projects with contractors now on site.

In order to move on with the construction works, Minister Ncube said, “To cater for ongoing and outstanding works on dam construction projects, an amount of $18,5 billion is being provided under this Supplementary Budget.”

Economist Prosper Chitambara said, “Infrastructure is important as it enables trade, powers businesses, creates opportunities for struggling communities and protects the nation from an increasingly unpredictable natural environment. The economy needs reliable infrastructure to connect supply chains and efficiently move goods and services across borders.”

He added that despite the importance of infrastructure, the country had not spent enough for decades to maintain and improve it. Before this push, it accounted for about 1,5 percent of the economy, compared to about 5,9 percent spent in Zambia in the past 5 to 6 years.

The Government is implementing the Presidential Rural Development Programme which seeks to drill a borehole in each of the country’s 35 000 villages integrated within a one hectare solar powered village horticulture garden.

As a result, a total of $766 million has been availed targeting procurement of drilling rigs and borehole drilling.

Economist Tinevimbo Shava said, “Investing in water and sanitation is an effective way of improving the economy. It will allow communities to live healthily, improve the health sector, and improve productivity in the country. Water affects the health sector and has a ripple effect on education, construction, manufacturing, and more.”

A total of $25,7 billion was availed during the period under review targeting mainly Harare-Masvingo-Beitbridge road which received $12,7 billion, with the balance being deployed towards rehabilitation and upgrading of the country’s road network under the Emergency Roads Rehabilitation Programme (ERRPII).

Minister Ncube said, “Remarkable progress has been released on the Harare,Masvingo-Beitbridge road with a total of 326,9km out of the target of 520km having been completed and now open to traffic, with 51,9km having been completed during the period January to June 2022.”

Going forward, Treasury said an additional amount of $33,2 billion will be spent in order to meet the target of 100km during the year 2022.

Minister Ncube said in the period under review an amount of $13 billion was disbursed through the budget towards emergency road works under the Emergency Road Rehabilitation Programme II (ERRPII) and a further $3,7 billion was financed from the Road Fund.

“To sustain work to year-end, an additional amount of $8,5 billion will be provided under this Supplementary Budget,” Minister Ncube said.

Economist Professor Tony Hawkins said, “Transportation is fundamental for a booming economy as it helps transport goods and services and enables people to access work, schools and recreational activities, which also plays a role in the economy.

“Without any improvement, the transport system will hinder continuous economic growth, especially in rural areas. A well-developed transport system will ensure the sustainable development of the economy throughout Zimbabwe,” he said.

To fund this spending, Treasury says it will issue Treasury Bills, a form of borrowing locally. This includes issuing a US dollar bond of US$100 million on the Victoria Falls Securities Exchange (VFEX).

The money raised will be for roads, health, and irrigation.

The Government also wants to draw the equivalent of $60,6 billion from IMF funds, which are yet to be disbursed.

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