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Capacity Use Up in Zimbabwe Construction, But Growth Remains Sluggish

  • Gibbs Dube

Revived projects that boosted growth this year included the dualization of the Beitbridge-Chirundu corridor, construction of water reservoirs and major improvements by Zimbabwe Platinum Holdings and other mining firms

Zimbabwean builders have been using an increasing share of their capacity, according to a survey by the Construction Industry Federation showing an 11 percentage point gain in capacity utilization this year though the sector is seen slowing in 2012.

The industry group said government funding of construction projects and the revival of public and private sector programs pushed capacity utilization to 33 percent from 22 percent in 2010, rebounding from the economic collapse of 2008-2009.

The group said this signals a slow economic recovery - though one hindered by political quarreling among unity government parties and skewed economic policies.

Revived projects that boosted growth in the sector this year include the dualization of the Beitbridge-Chirundu highway corridor, construction of a number of reservoirs and major improvements by Zimbabwe Platinum Holdings and other mining firms.

But economist Daniel Ndlela said the construction sector is expected to grow at a rate of only 2 percent in the coming year due to lack of foreign direct investment.

Observers say the indigenization or black empowerment program pushed by President Robert Mugabe's ZANU-PF party, which calls for a 51 percent local black stake in all foreign-owned businesses, has frightened off international investors.

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