Many of these
contractors poured personal capital and bank loans into the projects, expecting
prompt settlements that never came.
Some have
waited up to 10 months for payment, only to receive compensation converted into
local currency at unfavourable exchange rates, eroding the value of their
earnings and leaving them unable to cover their initial United States
dollar-denominated costs.
The crisis
exposes a deep fault line in Zimbabwe’s infrastructure development drive: the
government’s inability to promptly pay the companies rebuilding its roads.
The fallout has
not only crippled individual firms, but also threatens to derail the broader
ERRP as confidence evaporates among small and medium-sized enterprises that
form its backbone.
For Tawanda
Mangoma, director of Ngomla Investments (Pvt) Ltd, what began as an opportunity
for empowerment has turned into a nightmare of debt and litigation.
His company
rehabilitated Alko Road in Mwenezi and Sean Rebeiro Road in Chiredzi, investing
over US$500 000 raised from banks, relatives and friends.
“We pumped out
all our resources to make the government projects come to fruition,” Mangoma
told the Zimbabwe Independent.
“We were
optimistic that when the projects got finished, we would celebrate with joy and
honour of empowerment. But alas, payment delays gave us a heavy blow.”
After nearly 10
months of waiting, Ngomla Investments received a fraction of what it was owed.
“We expected
almost a million dollars in revenue, but we ended up receiving a paltry US$50
000 paid in RTGS,” Mangoma said.
The payment, he
added, was nowhere near enough to service his company’s foreign-denominated
debts.
“We are
battling serious legal reparations, which have stripped our glory and joy into
perennial court attendees defending legal battles,” Mangoma lamented, a
sentiment widely shared across the industry.
The plight of
these contractors reflects a broader fiscal squeeze.
Market analysts
cite a severe liquidity crunch within government, worsened by the Reserve Bank
of Zimbabwe’s strict policy against funding quasi-fiscal activities outside the
national budget.
While that
stance aims to rein in inflation, it has left ministries cash-starved and
delayed payments to suppliers. The result is a chilling effect on participation
in state infrastructure tenders.
“Participation
by small players in government projects has gone down drastically,” one
contractor, who requested anonymity, said.
“When payments
take nearly a year, you can’t pay your workers or service debts. It’s now a programme
for the well-connected.”
Many
contractors, he added, are now selling their machinery just to stay afloat.
“It is now
difficult to get back into business. We are offloading equipment to settle
debts incurred during the projects. Getting back into business has become
impossible.”
The ripple
effects have reached workers. According to Muchapiwa Mazarura,
secretary-general of the Zimbabwe Construction and Allied Trade Workers Union,
job losses in the sector have been mounting.
“For the past
one year, we have been experiencing difficulties negotiating salaries and
wages, the response we get from employers is that government is failing to pay
contractors,” Mazarura told the Independent recently. Zimbabwe Independent
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