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:
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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.
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One affected contractor, who spoke to Business Times on condition of anonymity, painted a grim picture of the fallout. She said:
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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.
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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:
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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.
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Zimbabwe National Chamber of Commerce (ZNCC) President Tapiwa Karoro said:
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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.
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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.
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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:
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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.
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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.
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Added Ncube:
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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.
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<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

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:
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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.
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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:
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One of my team members will get in touch with you on this.
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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 Zimbabwe Federation of Entrepreneurs (ZFE) wants the Ministry of Finance and Economic Development to address several challenges facing its members, including the suspension of payments to government contractors.
In a letter dated 24 November 2022, addressed to Finance Secretary George Guvamatanga, ZFE president Bright Mupfapairi said there is a need for “amicable” engagement between Treasury and the business sector. Reads the letter:
<blockquote>
Our members wish to know and are addressed on the government’s position regarding the re-valuation of invoices after the contract has been performed.
They also need clarity on the delays in the payment of re-valued invoices considering that our members would have suffered a loss of income as all payments are in local currency.
Clarity is also sort on the due diligence process by government as we believe there has been a procurement process whereby there are tenders with terms and conditions to be followed hence currently we have noted that there is a drastic shift affecting our members.
Our members also want assurance that since the year will be ending soon will all outstanding payments going to be made as there are various commitments made, also they are concerned about the cost of business and money.
</blockquote>
In August this year, the government suspended payments to its contractors as part of efforts to rescue the depreciating Zimbabwe dollar which was being ravaged by hyperinflation.
Guvamatanga directed government ministries, departments and agencies to suspend the payments.
Treasury accused contractors of submitting invoices of cash for goods and services using parallel market rates.

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