Development corridor stillborn

A planned inter-country trade expansion corridor between South Africa and Zimbabwe has failed to take off due to a lack of investor confidence in Zimbabwe. In 2000 the two countries signed an agreement on the Trans-Limpopo Spatial Development Initiative (TSLDI), with the objective of establishing a commercial corridor between South Africa's Limpopo province and Victoria Falls in Zimbabwe. Among its major components, the initiative would pave the way for increased agri-businesses, eco-tourism and infrastructure development programmes. The TLSDI included opportunities for cross-border private sector joint ventures to exploit untapped mineral resources, such as the methane gas beds in Zimbabwe's Matabeleland North province and the revival of the country's only diamond mine near Beitbridge. Twinning arrangements between South African municipalities in Limpopo province and those in the Matabeleland provinces of Zimbabwe were also on the cards. Developments along the corridor were planned to take place within 50 km of either side of the Bulawayo-Polokwane railway line. Zimbabwean business executives who spoke to IRIN said the project had effectively collapsed, as potential South African and international partners were unwilling to go into joint ventures with Zimbabweans because of the economic problems and political instability in the country. Investors considered it a high-risk investment destination and, apart from co-operation and exchange visits between twinned towns, there had been no progress. "The deal is dead. There are no foreign partners, and they all cite the unstable political and investment climate; there is also a general suspicion that the whole thing was a government talk show. The other problem is that businesses on both sides generally doubt the sincerity of the Zimbabwean government, and its ability to protect their interests, once established," said Salatiel Muleya, an executive member of the Beitbridge Business Association (BBA), on the border between the two countries. Because of existing business links with the business community in South Africa's Limpopo province, the BBA was identified as a key facilitator of investment in the corridor. Muleya said Zimbabwe's economic meltdown, coupled with the turmoil in the banking sector last year, were impediments to foreign investment. Zimbabwean municipalities that were part of the project included Gwanda in Matabeleland South, and Bulawayo and Victoria Falls in Matabeleland North. Gwanda mayor Thandeko Mnkandla told IRIN there had been occasional but unproductive meetings between the partners. "The project started off with great enthusiasm on both sides, but the change of mayors and council representation in all the participating Zimbabwean towns led to a death of political will. Government still shows great reluctance in taking up its role as chief facilitator of the project; our partners have developed cold feet. The problem is that all towns elected opposition councillors and mayors, so the project died a natural death. [National] government would have supported it if its [local] representatives had remained in charge," he alleged. When the TLDSI agreement was signed in 2000, Victoria Falls, Bulawayo and Gwanda were all run by ZANU-PF mayors and councillors. Since then, the opposition Movement for Democratic Change has won in all these towns, effectively turning the Zimbabwean side of the corridor into an opposition enclave. The Matabeleland Zambezi Water Project (MZWP) also collapsed. The food and water security component envisaged the building of a 450 km water pipeline from the Zambezi River to the city of Bulawayo. According to the TLSDI programme outline, several large-scale irrigation schemes were to be established on either side of the pipeline, as well as proposed mining ventures and lumber projects in the state-owned forests of Matabeleland North. In 2003, South African investors pulled out of the Lupane methane gas-mining venture, citing lack of commitment on the Zimbabwean side. The governor of Matabeleland North, Obert Mpofu, confirmed that no development had taken place since the signing of the TLDSI agreement. He blamed this on a lack of resources, and refuted allegations that government had abandoned the corridor for political reasons. Mpofu said the Zimbabwean government had since opted to finish the projects on its own, because there were no willing foreign investors. He said negotiations were under way with Far Eastern investors, who might be willing to become project partners. "Some of them will be coming to do the projects on a 'build, operate and transfer' basis. I cannot say who they are at the moment, but government is still considering fulfilling those obligations - there is plenty of political will to move our side of the project. As for Zimbabwe being an unsafe destination [for foreign investors], I do not understand how that can be true, because we still have businesses operating here," Mpofu told IRIN. However, a number of tour operators in South Africa said they were still waiting for the Zimbabwean economy to stabilise. "We were all pleased with the project, but political instability and economic turmoil makes Zimbabwe a very risky investment destination. Everyone has adopted a wait-and-see attitude - but we are all jittery about having the Zimbabwe government as a partner. In investment we expect multiplying and not diminishing returns, as would be the case if I relocate or expand into Zimbabwe," said Joan Fitzgerald, a tour operator in Makhado, in South Africa's Limpopo province. Officials at the Zimbabwean Ministry of Industry and International Trade said government was only a facilitator in what was essentially a private sector initiative. "Government cannot be a facilitator and an investor at the same time, so it is up to business associations on both sides of the Limpopo [river] to revive the project if they think it is collapsing," said an official who wished to remain anonymous.