DUBLIN--(BUSINESS WIRE)--Research and Markets (http://www.researchandmarkets.com/research/slzmxm/zimbabwe_infrastru) has announced the addition of the "Zimbabwe Infrastructure Report Q3 2012" report to their offering.
Zimbabwe has the potential to become a very attractive frontier market. Since reforms were implemented in 2009, the country has witnessed a construction boom, driven by a pressing need to improve infrastructure as the economy returns to growth following a lost decade. At the same time, the economy is seeing rising demand for commercial and residential real estate. Both trends are expected to continue over the medium term; however, there are strong downside risks, with limited access to financing and political risk the most pressing.
Key developments in the sector include:
- In January 2012, Zimbabwe announced it would be drawing US$40mn from an emergency IMF fund to invest in urgent water and electricity upgrades, as a major typhoid outbreak plagued Harare. Investment will be channelled into upgrading access to potable water and sanitation.
- Construction of a US$3bn coal-fired power plant moved a step closer to realisation in January 2012, after the unnamed French consortium that proposed the project, to be located near the Lusulu coal fields in Binga, Matabeleland North, had the project approved by the government.
The 2,000 megawatt (MW) is to be constructed over a four-year period and once completed, will almost double the country's generation capacity.
Plans to establish the Zimbabwe Construction Industry Council (ZCIC) were progressing in January 2012, with a draft bill proposed in 2011 having been examined by the Public Works Ministry's legal department. Establishing a council would significantly improve the structure of the construction industry, with the implementation of legal procedures and a code of conduct to ensure adherence to health and safety standards and quality of work.
It is estimated by African Development Bank that US$5bn needs to be invested in Zimbabwe's infrastructure by the private sector in order to rehabilitate the country's infrastructure. However, major improvements in the business environment are needed to attract international investment. Some interest has been registered and we are seeing a slow trickling through of private investment, which is creating signs of life across various sectors:
Given these trends, Zimbabwe's construction sector is forecast to record strong growth over the medium term, with real growth estimated to average 9.3% per year between 2012 and 2016. This is in significant contrast to a prolonged period of mostly negative growth up until 2008. However, pertinent risks to our optimistic outlook remain:
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