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Phinias Tafa Infrastructure Report
Since I started writing for this column, I have discovered how people are desperate to have public infrastructure sorted. I have received a lot of applause. I have also received a lot of criticism especially when I suggested that the country should introduce an infrastructure tax.

The major issue was that we are already overburdened with taxes. My suggestion was that this will be done without increasing the tax level but restructuring the current tax structure.

One reader asked me about the country’s policy on integrated public infrastructure.

My searches in the relevant ministry and related organisation like the Infrastructural Bank of Zimbabwe (IBDZ) did not find much.

Thus I decided to make a detour and write on the country’s public policy.

This week we look at the possibility of an integrated approach to infrastructure development in the form of a national infrastructure policy.

The urgent need for very drastic increases in infrastructure investments in our country is very clear. This is supported by an avalanche of ambitious proposals across all sectors.

In the energy sectors we have heard of solar fields, expansion of Hwange thermal power station, Munyati, Harare and Kariba hydro. In the transport sector there is talk of the dualisation of the Beitbridge highway.

Economists agree that priorities for project selection vary by country and by sector but, at the overall level, the very wide differences in basic infrastructure development between our country’s productive sectors is calling for an integrated approach to national infrastructure development.

The sector-based approach we are using may result in serious infrastructure imbalances between sectors and between regions.

For example we may have very reliable energy supplies and a poor transport and communication network.

This will undo efforts to turn our economic fortunes around.

This illustrates and justifies the urgent need to approach our infrastructure development in an integrated manner that is all inclusive and broad based, an approach that cuts across sectoral and spatial boundaries.

As is the standard internationally, most of the main issues that policymakers need to address to solve the country’s infrastructure needs are on the supply side.

To come up with an enduring Integrated National Infrastructure Policy our policy makers should pay attention to the following high priority seven related supply-side issues.

Selection and preparation of appropriate projects

Finance

Pricing

Access

Governance and management

Policy and regulatory policies

Climate change.

Selection and preparation of appropriate projects

Since independence the country continues to operate without a clearly established optimum level of infrastructure investment, a clear method to prioritise projects besides preservation of political interests and an appropriate project preparation procedure.

Clear and consistent policy statements establish a level playing field for all actors in the infrastructure sector.

There are set international standards to address these areas and the country should use these as an indicator at national level.

For example in the developing world total infrastructure investments are normally north of 7 per cent of GDP and against 3 per cent in middle-income countries.

On average Zimbabwe is around 2% and this means a bleak future for the country.

This top-down approach to policy must be married to a ‘bottom-up’ approach of involving the citizenry to ensure selection of individual projects of far reaching national importance.

These must satisfy high level socio-economic and environmental requirements like use of local labour.

Finance

This section must answer the question where will the money to develop infrastructure come from.

If the policy does not address this crucial part in a practical and sustainable manner, then it may become nothing but a slogan document like some that have come during our lifetime.

Infrastructure is long-term in nature and hence the policy must not address 12 months funding but prospects to mobilise long-term funds from various sources like our national budget, national and international private sector investments and domestic utilities like user charges eg tolls.

These may also be used to access rich international infrastructure mutual funds like the Global Infrastructure Fund.

Pricing of infrastructure

services

Faced with a struggling population, the Zimbabwean government, and like other countries in the developing world, employs price suppression under pro-poor policies. A bird’s eye analysis of our socio-politico and economic situation will make one appreciate this approach.

However, price suppression must be funded by subsidies and sadly this give rise to market imperfections like national budget macroeconomic costs, inequality in access to national financial resources, imbalances in infrastructure investment and growth and poor allocation of other resources.

Infrastructure analysts argue that the major reason why consumers are reluctant to pay market prices for infrastructure services appears to be lack of effective access, i.e. physical access and the minimum amount that must be paid for services.

The solution to this lies in market structures that must be made to ensure suppliers of infrastructure services face market pressures.

This will force them to structure their products in accordance to the requirements of the mass consumption market.

Barriers that prevent suppliers from entering the mass market like regulatory, technical and institutional must be addressed by the integrated policy framework.

For example the framework should establish regulatory minimum standards in the technical, safety and financial arena.

The double challenges that our infrastructure parastatals like ZESA, NRZ, CAAZ and ZINARA must address include under this section are to find methods of increasing inclusion in the products they provide while, at the same time, meeting associated minimum costs.

Governance and management

In Zimbabwe national infrastructure provision has traditionally been left in the hands of state-owned organisations (SOO) or parastatals.

The justification has been that SOOs have national interests and are responsive to social goals like equity and empowerment.

However, the new thinking in the modern world is that SOO are dinosaurs of inefficiencies.

To that end there is huge consensus that citizens tend to gain more if policy makers competition in infrastructure sectors.

The Mutare – Plumtree highway is a result of this approach. Besides providing fairly cheaper funds, the partner in the project also brought private sector related efficiencies like cost rationalisation.

Policy and regulatory policies

Good public policies supported by effective regulatory structures are critical to the development of efficient infrastructure in Zimbabwe.

Clear and consistent policy statements establish a level playing field for all actors in the infrastructure sector. Regulatory arrangements are key and the media and other civil society actors must be non-partisan monitors.

Climate change

Climate change is a reality and its effects are becoming catastrophic. We talk of droughts, floods and heats waves.

Policy makers must be wary of the effects of our infrastructure on worsening the situation. For example, the future use of coal to generate electricity in Hwange must be considered seriously.

Climate change is also imposing additional costs to already strained infrastructure budgets.

Governments are expected to develop of mitigatory interventions.

Infrastructure projects must be designed in a way that do not exacerbate the situation but also in a way that sustain effects of climate change.

The country must strongly embrace infrastructure that sustain a green country or a green economy. We need infrastructure that is environmentally friendly.

In next week’s article I will propose a generic national infrastructure policy for Zimbabwe.