Local construction companies are facing major challenges as the government grapples with a worsening financial crisis.
The Treasury is struggling to meet even basic obligations, leaving some contractor invoices unpaid for almost a year.
In an interview with the Business Times, Joyline Zindaga, the CEO of the Zimbabwe Building Contractors Association (ZBCA), confirmed that these prolonged payment delays have left many contractors unable to complete government projects. Said Zindaga:
<blockquote>
We are engaging the Treasury to ensure our members receive their payments. Many contractors are in distress, unable to complete projects due to capital constraints. The authorities must act swiftly to prevent further disruptions.
</blockquote>
One affected contractor, who spoke to Business Times on condition of anonymity, painted a grim picture of the fallout. She said:
<blockquote>
I have not been paid for over a year. We are expected to complete projects, but how do we do that when we can’t pay workers, suppliers, or service our loans? Many employees have already left, and some are threatening legal action.
</blockquote>
Adding to contractors’ frustrations, the government has been accused of engaging in questionable financial practices.
The last major payment to contractors, made on September 27, 2024, was made in ZiG – only for the ZiG to be suddenly devalued just hours after the payments were issued.
According to industry estimates, the Zimbabwean government currently owes over US$1.8 billion in outstanding payments to various service providers, with some of these debts dating back to as early as August 2024.
Rosemary Mpofu, the CEO of the Consumer Council of Zimbabwe (CCZ), warned that the government’s failure to pay its debts to service providers is already having a detrimental impact on overall consumer demand. She said:
<blockquote>
We understand the need for fiscal discipline, but these prolonged delays are causing unnecessary distress. 
More companies are on the brink of collapse, and unemployment is set to rise unless urgent action is taken.
</blockquote>
Zimbabwe National Chamber of Commerce (ZNCC) President Tapiwa Karoro said:
<blockquote>
Delaying payments to service providers is draining liquidity from the market. If this continues, the government will be forced to fund its fiscal deficit through borrowing or printing money—both of which have dire consequences.
</blockquote>
More: <a href="https://businesstimes.co.zw/contractors-in-limbo/">Business Times</a>

Pindula News

The government in Zimbabwe is having money problems and can't pay construction companies. This means that contractors are not getting paid for their work, and they are struggling to finish projects. The government owes a lot of money to different businesses, and this is making things worse for the economy. Some companies may go out of business, and more people might lose their jobs if the government doesn't act quickly. It's a tough situation for everyone involved, and the longer it goes on, the worse it will get.

Cash-strapped Government Fails To Pay Contractors

The government may close the bank accounts of 51 suppliers who have been blacklisted for engaging in illegal foreign currency dealings, with the National Prosecution Authority (NPA) set to determine the next steps.
On Wednesday, 24 July, Finance, Economic Development and Investment Promotion Minister, Mthuli Ncube, announced that the government had blacklisted 51 contractors for illegally channelling funds to the black market after receiving payments in local currency.
The blacklisted contractors include Browline Transport (Pvt), Exceptional Office Fitouts and Shop Fitters, Diagno Pharm(Pvt) Ltd, Zambezi Bulk Plant Hire, and Avant Garde Group.
Others are Bezzei Enterprises, Golyn Supply Chain Solutions, Lennillim Investments, Advetoois Private Limited, Swasfontain, Siketaal Investments, Motornet Private Limited, ZimQuick Windscreen, Long Reach Technologies, and Blessing Africa Tech Private Limited.
In an interview with the <a href="https://www.theindependent.co.zw/local-news/article/200030116/black-listed-govt-suppliers-face-arrest-opc-defence-dominate-in-deals-with-affected-firms">Independent</a>, the Permanent Secretary for the Ministry of Information, Publicity and Broadcasting Services, Nick Mangwana said that while these illicit activities may not have directly harmed the government, they destabilised the country’s exchange rate. Said Mangwana:
<blockquote>
Government action in such cases is normally debarring such companies. This will stop them from supplying to the government. If the NPA believes there is enough evidence of a crime then prosecution will certainly follow, which includes the closing of the accounts.
These companies got money from the government after supplying goods or services. They then took the money and changed it to US dollars on the black market.
That is the gist of the cases. There is no direct prejudice to the government. What is affected by such actions is the exchange rate, which affects the performance of the economy and the welfare of ordinary citizens.
</blockquote>
Mangwana acknowledged that these firms turned to the black market to protect their businesses after being paid in the then rapidly depreciating Zimbabwean dollar. He said:
<blockquote>
Let me make it clear that the transgression by these companies is not that they got money and failed to perform or supply.
It is that when they got paid for the goods or services, they went to the black market and changed the money to US dollars to hold value.
</blockquote>
According to the Independent, ten firms affected by the crackdown had deals with the Ministry of Defence, and seven were suppliers to the Office of the President and Cabinet (OPC). The Ministry of Home Affairs also had a significant number of blacklisted suppliers.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

The government is stopping 51 companies from doing business. These companies were caught changing money illegally. They got money in local currency from the government, but then changed it to US dollars on the black market. This makes the country's money worth less. The government might close their bank accounts. This affects the economy and normal people. The companies did this to protect their business from losing money. Some of these companies have contracts with the Ministry of Defence and the Office of the President and Cabinet.

Directors Of Black-listed Government Suppliers Face Arrest

The Treasury has blacklisted 51 contractors for illegally channelling funds to the black market after receiving payments in local currency.
In a statement issued on Wednesday, 24 July, Finance, Economic Development and Investment Promotion Minister, Mthuli Ncube, said the move to blacklist the contractors is part of increased measures to stabilise the ZiG and contain inflation.
The blacklisted contractors include Browline Transport (Pvt), Exceptional Office Fitouts and Shop Fitters, Diagno Pharm(Pvt) Ltd, Zambezi Bulk Plant Hire, and Avant Garde Group. Said Ncube:
<blockquote>
Government has blacklisted fifty-one (51) contractors for unlawfully diverting received payments for goods and services to the illegal foreign currency parallel market.
This action has been taken in pursuit of Government’s continued efforts to improve economic stability and restore confidence in the financial system and provide a conducive business environment.
The blacklisted companies have been under scrutiny since 18 July 2022, when Treasury tasked the Financial Intelligence Unit to monitor all payments of high-value Government contracts to identify those involved in illegal foreign currency dealings.
This was meant to contain market forces and align the macro-economy to the liberalised foreign exchange market, whose exchange rate is freely determined by the banking system based on demand and supply.
The introduction of the ZIG as legal tender on 5 April 2024, further stabilised the economy and brought about orderly pricing in the market, a positive development that Government seeks to maintain. 
Government remains committed to improving the economy and will continue to monitor developments in the market.
The continued implementation of the Value for Money principle in Government has realised savings that have enabled the implementation of programmes and projects that benefit citizens.
</blockquote>
Added Ncube:
<blockquote>
The blacklisting listing entails that the above-named companies will be barred from being suppliers or service providers to government as well as the government agencies and this extends to other companies connected with the named directors.
</blockquote>
<img alt="Image" decoding="async" src="https://pbs.twimg.com/media/GTRp4LfW4AAGeBO?format=jpg&amp;name=large"/><img alt="Image" decoding="async" src="https://pbs.twimg.com/media/GTRp4LlXEAAurlB?format=jpg&amp;name=large"/><img alt="Image" decoding="async" src="https://pbs.twimg.com/media/GTRp4LmXUAArdDs?format=jpg&amp;name=large"/>
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

The government has stopped 51 companies who were cheating by trading money illegally in the black market. The Minister of Finance said this move is to make things stable and control the rising prices. The companies that did this include Browline Transport (Pvt), Exceptional Office Fitouts and Shop Fitters, Diagno Pharm(Pvt) Ltd, Zambezi Bulk Plant Hire, and Avant Garde Group. The government has been keeping an eye on them since 18 July. This step is taken to keep the economy strong. The blacklisted companies will not be able to work with the government anymore. This will help in saving money and benefit the people.

Govt Blacklists 51 Contractors For Trading On Black Market

The Zimbabwe National Road Administration (ZINARA) says it will not pay contractors that fail to meet the required standards and specifications.
Speaking with the <a href="https://newsday.co.zw/theindependent/local-news/article/200023474/zinara-tightens-screws-on-road-contractors">Zimbabwe Independent</a>, ZINARA chief executive officer Nkosinathi Ncube said all work done by contractors will be checked thoroughly. The contractor will not be paid if it fails to meet the required standards. Said Ncube:
<blockquote>
After a road authority has submitted its interim payment certificate (IPC), it invites a ZINARA engineer to undertake thorough quality checks and confirm that the work was done according to the specifications laid out in the scope of works.
If the work does not meet the required standards and specifications, ZINARA does not pay.
This model of monitoring and evaluation of projects will go a long way in improving the quality of road works being undertaken.
Over the past year, we have increased our technical capacity through the engagement of provincial engineers who play a critical monitoring evaluation and support role for road authorities throughout the country.
They are equipped and qualified to inspect and certify road works undertaken by road authorities before drawdowns of disbursements are done.
</blockquote>
The move follows a public outcry against some private companies contracted by the government to rehabilitate national roads which developed potholes within a few months of rehabilitation.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

We Won't Pay For Substandard Work By Contractors - ZINARA

Some construction companies have reportedly abandoned road rehabilitation works along the Beitbridge to Harare and Beitbridge to Bulawayo roads over outstanding payments owed by the Government.
The <a href="https://newsday.co.zw/southerneye/local/article/200021576/govt-fails-to-pay-road-contractors">Southern Eye</a> reported that some of the contractors are owed several billions of dollars in local currency.
An official from one of the companies contracted to upgrade the Harare-Bulawayo-Beitbridge Highway claimed that they were last paid before July 2023. Said the official:
<blockquote>
Road making is costly and there are daily expenses like fuel. We were last paid way back before the elections and we have since stopped.
We need fuels, oils, and building materials and without money road building won’t move.
</blockquote>
The Government engaged local contractors to carry out infrastructural projects after encountering challenges due to the country’s high risk and bad payment record.
When contacted for a comment by the Southern Eye, Transport and Infrastructural Development Ministry permanent secretary Joy Makumbe said:
<blockquote>
One of my team members will get in touch with you on this.
</blockquote>
However, the publication reported that they had not received a response from the ministry at the time of going to print.
In 2021, the Government launched the Emergency Road Rehabilitation Project (ERRP) after President Emmerson Mnangagwa had declared the country’s roads a national disaster.
However, some of the contracted companies have been accused of doing shoddy work.
More: <a href="https://www.pindula.co.zw/">Pindula News</a>

Roads Rehabilitation Stalls As Govt Fails To Pay Contractors

The Reserve Bank of Zimbabwe (RBZ)’s Financial Intelligence Unit (FIU) says it has blacklisted six contractors that were doing business with the Government for trading on the foreign currency black market.
The FIU has also frozen the bank accounts of five leading wholesalers for overcharging.
Speaking to State media, FIU director-general Oliver Chiperesa warned that they take stern action against companies involved in the parallel market. He said:
<blockquote>
So far, we have identified six or so (contractors) that we have taken action against, including referring to the Ministry (of Finance and Economic Development) for blacklisting. We expect the stability to continue.
I think Government suppliers are no longer really getting involved in the parallel market because they are aware of the consequence.
It’s only a few that are still doing it and we have taken stern action against those by freezing their accounts and referring them to the ministry.
So, following the action taken by the ministry last year, we continue to refer more companies periodically, as and when we find them.
</blockquote>
Last year, the Government blacklisted 19 suppliers and contractors for trading on the foreign currency black market.
Chiperesa said the FIU has frozen the bank accounts of five leading wholesalers for overpricing through forward pricing. He said:
<blockquote>
We are not confining ourselves to the parallel market drivers only, but also to wholesalers who are overcharging.
So far, in the last two weeks, we have frozen the accounts of five major retail and wholesale shops pending further investigations.
We are continuing with our work. Our teams are out there identifying more companies and entities that are doing the same.
There is really no excuse for the companies to be using parallel market rates at all at this stage with the near convergence that we have enjoyed over the last few months between the parallel market and official rates.
It’s just greediness that is driving some of these companies to do that.
</blockquote>
Some companies that are reportedly mopping up US dollars on the black market are understood to be also benefitting from the RBZ foreign currency auction market. | <a href="https://www.sundaynews.co.zw/rbz-blacklists-companies-11-firms-sanctioned-over-black-market-deals-overpricing-same-firms-reportedly-benefitting-from-rbz-auction/">The Sunday News</a>

RBZ Sanctions 11 More Companies Over Black Market Deals

The Minister of State for Presidential Affairs in charge of implementation and monitoring of governmental programmes, Jorum Gumbo has urged contractors working on the Gwayi-Shangani Dam to employ local people.
Gumbo said the involvement of local people in the implementation of programmes promotes a strong sense of ownership for projects.
He was speaking after touring the pipeline under construction to link up the dam and the city of Bulawayo last week. Gumbo said:
<blockquote>
It is my hope that members of the local community are participating in the project through employment opportunities in various aspects of its implementation.
In my view, community participation promotes a strong sense of ownership of the project.
The rapid development that we seek to achieve through the 100-Day Cycle Programme can only be achieved if communities are allowed to actively participate in the projects as opposed to being passive beneficiaries.
</blockquote>
The Gwayi-Shangani-Bulawayo pipeline is 250km long. It is expected to stimulate rural industrialisation through irrigation projects.
Besides at least 10 000 hectares of land that will be put under irrigation, a 10MW hydro-electric plant will be built at the dam.
The dam will draw water from the Zambezi River and supply water to the city of Bulawayo.
Last week the Minister of Finance and Economic Development, Mthuli Ncube, said the project was at 69% completion and the dam height is now at 31 meters out of the required 72 meters. | <a href="https://businesstimes.co.zw/consider-locals-gwayi-shangani-contractors-urged/">Business Times</a>

Gwayi-Shangani Dam Contractors Urged To Employ Locals

The government has suspended payments to its contractors as part of efforts to rescue the depreciating Zimbabwe dollar that is fueling hyperinflation.
The Permanent Secretary of Finance and Economic Development George Guvamatanga directed government ministries, departments and agencies to suspend the payments.
This comes after the Treasury noticed that the contractors were submitting invoices of cash for goods and services using parallel market rates.
Guvamatanga said Ministries, Departments and Agencies (MDAs) are required to seek approval from Treasury for current and future contract pricing and share with it their due diligence on existing charges. He said:
<blockquote>
Such a pricing framework by the suppliers of goods and services has not only been causing inflationary pressures but also parallel market activities.
This has resultantly caused instability in the foreign exchange market characterized by unnecessary movements in the rate resulting in exorbitant prices being charged.
</blockquote>
In July, the government announced measures to deal with contractors who were allegedly channelling funds to the black foreign currency exchange market.
Finance Minister Mthuli Ncube warned that the suppliers concerned, their directors and related companies will be blacklisted with the Procurement and Regulatory Authority of Zimbabwe and will be banned from participating in any government tenders.
Meanwhile, the move to suspend payments to government contractors adds to others announced this year to stabilize the currency and curb inflation.
These include lifting the key interest rate to 200% from 80% in June, reintroducing the US dollar as legal currency, selling gold coins and potentially setting up a currency board.
More: <a href="https://www.bnnbloomberg.ca/hyperinflation-spurs-zimbabwe-to-halt-payments-to-contractors-1.1804476">Bloomberg</a>

Govt Halts Payments To Its Contractors To Curb Inflation

Transport and Infrastructural Development Minister Felix Mhona said that contractors awarded tenders under the ongoing Emergency Road Repair Programme (Phase 2) who fail to perform as expected will not be given new contracts in future.
Mhona said legal action will also be taken against the contractors to recover funds they may have already been paid and wasted.
In a speech read on his behalf by Permanent Secretary, Theodius Chinyanga, while addressing legislators in the Portfolio Committee on Transport and Infrastructure Development touring road projects and tollgates at a meeting in Nyanga on Friday, Mhona said:
<blockquote>
As we implement road works under ERRP 2, we have noted that some contractors are not meeting expected standards as some of them are already showing signs of distress.
Some are even failing to execute the works after being awarded contracts.
As Government, we have taken steps toward blacklisting in extreme cases.
I have instructed my officials to come up with modalities to recover any public funds which may have been, if any, lost due to the work of under-performing contractors using the legal route.
</blockquote>
Mhona said notable progress has been recorded in upgrading highways which are the arteries of the economy. He said:
<blockquote>
In this regard, I am pleased to inform this house that more than 300km of road has been opened to traffic along the Harare-Beitbridge highway.
Coupled with the upgrading of the Beitbridge Border Post, this positions Zimbabwe among the best routes for transporters within the SADC region, especially given its strategic locus along the North-South Corridor, he said.
Other major highways linking to ports are on the list for urgent development along with feeder and primary roads.
</blockquote>
<h4>More: <a href="https://www.herald.co.zw/govt-blacklists-road-contractors-failing-to-meet-standards/">The Herald</a></h4>

Govt Blacklists Road Contractors For Shoddy Work

The Tobacco Industry and Marketing Board (TIMB) says it is investigating contractors who are allegedly manipulating the prices of the golden leaf thereby shortchanging farmers.
TIMB chairman Patrick Devenish said that the tobacco industry regulator has observed prices being paid to farmers by contractors were lower than those prevailing at the auction floors. Said Denevish:
<blockquote>We are following up on those developments and after the completion of investigations, we hope to resolve that anomaly as quickly as possible.</blockquote>
Zimbabwe Commercial Farmers Union (ZFCU) president Shadreck Makombe said the fall in contracted tobacco prices could see some farmers failing to pay debts and lose their properties to the merchants. He said:
<blockquote>In the past few weeks, I have seen a significant drop in contract prices compared to the auction ones, this is worrisome in that the majority of farmers are now contracted and they can’t service off their debts.
This may result in some farmers losing their cattle, carts and other valuables when merchants move to recover their money.</blockquote>
Makombe said 95 per cent of tobacco farmers were contracted by merchants and other private companies.
He said the tobacco contractors have colluded on prices to ensure that farmers will languish in debt and will not be able to finish off debts. Added Makombe:
<blockquote>Having seen that farmers were starting to gain ground, the merchant’s convened mid-April to start fixing the prices and from the early 20s of April, the pricing started falling.
At the beginning of the selling season, contracted tobacco was fetching an average price of US$2,40 per kilogramme (kg) while auctioned tobacco averaged US$2,15 per kg but last week, the price of contracted tobacco was pegged at US$2,60 per kg compared to US$2,66/kg for auctioned tobacco.</blockquote>
<h4>More: <a href="https://www.sundaynews.co.zw/tobacco-board-investigates-forex-leakages/" rel="noopener" target="_blank">The Sunday News</a></h4>

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