ZB Financial Holdings (ZBFH) and the Zimbabwe National Roads Administration (Zinara) have resumed talks to raise funds from the domestic market to rehabilitate the country’s deteriorating road network.
It is estimated that nearly 80% of Zimbabwe’s road network is in poor condition and most roads are now way beyond their design life and are in an advanced state of disrepair after being used for the past 60 years, according to official data obtained from the ministry of Transport and Infrastructural Development.
Last year, ZB deferred the plan to roll out an infrastructure bond due to acute shortage of foreign currency.
The lender’s group chief executive officer, Ron Mutandagayi, said the forex situation has improved following the introduction of the Dutch foreign currency auction system.
Mutandagayi said the group has resumed discussions with Zinara through ZB Capital, a unit of ZBFHL.
“We are ready and up for the task we are just waiting for them to shout out so that we can raise the money,” he said.
“When they give us the mandate, we approach the market with a commercial paper then we apply for liquidity asset status and tax exemption, then we go into the market to raise the required amount.”
Mutandagayi said ZB has a lot of options to raise the money required which include targeting the firms wanting to list at Victoria Falls Stock Exchange and the foreign currency trading platform.
According to recent studies by the African Development Bank and the World Bank, Zimbabwe requires US$5bn to rehabilitate the country’s entire road network that has been affected by years of neglect.
A recent report by the Ministry of Transport and Infrastructural Development estimates that Zimbabwe’s 95,000 kilometres (km) road network needs to be attended to.
Of these, about 17, 400km tarred roads, which fall under the national government and urban authorities need to be upgraded or maintained while about 77, 000km of gravel and earth roads that fall under the government, rural district authorities and the District Development Fund are also in need of attention.
In February 2017, the government declared that the country’s roads were a national disaster.
Consequently, road authorities including the Department of Roads, District Development Fund, urban and rural district councils, embarked on the Emergency Road Rehabilitation Programme to restore and expand the country’s road network to improve safety conditions on roads plagued by a scourge of traffic accidents.
But, the projects have been hampered by lack of funding in the past few months.
In June last year, Zinara, disbursed about ZWL$143.3m for maintenance of roads countrywide.
The department of roads in the Ministry of Transport and Infrastructural Development, District Development Fund urban and rural district councils were the beneficiaries of the funds.