Zimbabwe on Monday signed a $1billion deal with the Sinosteel Corp that will see the Chinese firm building a 400 megawatt coal bed methane power plant in Matabeleland North province and setting up ferrochrome smelters at its local unit at Zimasco. The investment, with potential to create 250 000 jobs, will be implemented in phases.
The first phase involves the drilling of two coal bed methane (CBM) wells at Shangani grants to fire a 12 MW pilot power station. The company will also build two ferrochrome smelters in Zvishavane and another one in Kwekwe where it already operates the country’s largest ferrochrome plant. Mines and Mining Development Minister Winston Chitando signed the deal on behalf of the Government while the Chinese firm was represented by its president Andong Liu.
The Monday deal brings to about $12 billion Foreign Direct Investment (FDI) commitment that the new administration has attracted in the past five months.
President Emmerson Mnangagwa has attributed this positive response to cross-cutting reforms being implemented by Government in order to make the country an attractive place to do business. Government has declared that Zimbabwe is Open for Business and Cde Mnangagwa said local authorities should complement Government’s efforts to attract FDI by creating an enabling environment to ease the doing of business in their communities.
He said the District Development Fund and local authorities should accelerate rehabilitation and maintenance works on local and feeder roads under their purview. The President said the recovery and development of the economy is underpinned by prompt movements of goods and services hence the urgent need to work on the country’s road network.
The surge in FDI commitment is a positive development which should spur everybody to continue working hard to make Zimbabwe an attractive investment destination. We want at this juncture to point out that these deals which are being signed do not immediately translate into revenue as some people would want to believe.
It would take some time for some of the projects to be implemented and for the country to enjoy the benefits of the new investments hence the need for the people to be patient. What is not in dispute is that the sweeping investment reforms underway have had a positive impact as evidenced by the increased number of foreign companies wanting to invest in the country.
The workers, both in the public and private sector, should therefore not expect an immediate upwards review of their wages and salaries. Government has increased salaries of civil servants by 15 percent which, as stated before, is a huge sacrifice given the limited resources at its disposal. Government has also started clearing allowance arrears for health workers dating back to 2010 and all this is a demonstration of Government’s sensitivity to the plight of its workers despite the resource constraints it is facing.
Most of the big projects would be implemented over a number of years and it will therefore take long for them to impact on the economy.
We want to once again urge people to remain focused on turning around the economy which, as already alluded to, cannot be achieved overnight.