Zimbabwe Infrastructure Report Q1 2016
BMI View: The country's construction industry remains high risk, poorly financed and subject to theunattractive investment policies of President Robert Mugabe, with average annual real growth between2015-2024 expected to be a mediocre 2.6%. Zimbabwe is keen to encourage foreign investment, with Chinaso far leading inroads into the country's power and mining sectors. However, even Chinese investment islower than expected and Mugabe's rhetoric strongly points to continued restraints on foreign investment.
We expect continued weak growth in the Zimbabwe construction industry as high risks, little financingavailability and poor growth prospects ward off investors. As such, we forecast 1.4% real growth for2015, and an annual average growth of 2.6% over the next 10 years.
We highlight upside potential for the power sector as Sable Mining Africa signed a memorandum ofunderstanding with Chinese firm CITIC Construction to build a 600MW coal-fired power plant at its192.36sq km Lubu coal mine in Zimbabwe. The mine will supply coal to the commercial power station.
The project is part of the Zimbabwean government and Ministry of Energy and Power Development'splans to promote the development of energy and power generation.
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