By Andrew Field – Follow on Twitter
The exploitation of vast resources of coal in Botswana into viable exports to Asian and eastern nations, such as India and China has, apparently, a Zimbabwean impediment. Studies into the more viable routes to get Botswana’s coal reserves to the sea opt for routes which transverse either Namibia or Mozambique (via Zimbabwe). The latter, with its port at Ponta Techobanine, is considered the better choice. But Zimbabwe, through which this route would pass, is considered too much of a sovereign risk to would be investors.
In a loose kind of way, there are three power bases at stake in this tale of economic woe, the power of coal, electricity and then politics. Zimbabwe’s economy, it would seem, has been traumatised by each of them and there is no letting up as to when this might subside.
Zimbabwe is not without its huge coal reserves, a source of power, the better known being Hwange, but the larger comprises the huge untapped resources of the Sengwa, with its high coke value ore. Export route viability studies have actually considered the Sengwa fields as a potential partner in a rail route which would transverse Zimbabwe. One may well question quite why the Sengwa coal fields are not being fully exploited and perhaps why Zimbabwe was not ahead of Botswana in not only resourcing viable export routes to the sea, but fully implementing them too.
Electrical power is not abundant in Zimbabwe, in fact load shedding of electrical power is essential to help shoddy supply keep up with growing demand. There is a 700 megawatt shortage on the grid, and South Africa is a major supplier of the deficit. Conservative estimates suggest Zimbabwe has unpaid bills in the tune of US$150 million with its southern supplier and Zimbabwe is not ‘coughing up’. Sengwa lays for all purposes mostly idle, despite its huge indirect potential in power and export revenue generation, and Hwange is certainly not up to steam in either too.
The single most damaging power is that of the political variety or persuasion. Zimbabweans are so thoroughly pre-occupied with the consuming, if not petty, power play between one party and the other, that they seem not to be seeing the wood for the trees on the economic front which affects them most. One of the principle deterrents to foreign direct investment in Zimbabwe is the nationalist vogue towards indigenisation. Appropriation of majority stakes in foreign enterprise has become a misdirected priority. It is a highly emotive issue for local people, the majority of whom, in the long term, are really unlikely to reap its alleged empowerment benefits. Indigenisation is the tree obscuring the wood.
If anything, indigenisation has done more to scuttle economic growth in Zimbabwe than any other post inflation debacle policy. For a nation which so desperately needs foreign direct investment in its mining sector, not to mention others, Zimbabwe’s nationalist politicians are giving out all the wrong signals. The mining sector has borne the brunt of the first phase of indigenisation. Large mining houses have stopped all new developments; the stock market has consequently suffered a long marked depression, especially in mining counters; there is a liquidity squeeze; and no hope on the horizon that the folly might subside. Clearly, it is all a little too much for the limited minds of some politicians who espouse such damaging philosophy.
Part of the prejudice lies in the fact that Sengwa coal is not streaming down the rail routes to the sea; nor is local coal generating sufficient power to supplement the grid; nor is Zimbabwe reducing its dependence of direct foreign power imports; and now there is little hope that massive exports of Botswana’s coal will transit Zimbabwe, thus generate employment and enterprise.
It is a ludicrous state of affairs with much blind fumbling in the cesspits of political chicanery. Surprisingly, Zimbabweans are not questioning the lunacy, most likely in the naive and unlikely hope that perhaps the politicians might be right: that it will lead them to the holy grail of empowerment, wealth and happiness. Ice will form in burning coal furnaces before that happens.
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