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Cablegate: Emigrants Fuel Housing Construction

This record is a partial extract of the original cable. The full text of the original cable is not available.

151423Z Dec 03

UNCLAS HARARE 002410

SIPDIS

STATE FOR AF/S
NSC FOR SENIOR AFRICA DIRECTOR JFRAZER
USDOC FOR 2037 DIEMOND
TREASURY FOR OREN WYCHE-SHAW
PASS USTR FLORIZELLE LISER
STATE PASS USAID FOR MARJORIE COPSON

E. O. 12958: N/A
TAGS: EINV ETRD ECON EFIN PGOV ZI
SUBJECT: Emigrants Fuel Housing Construction


1. Summary: Zimbabwean living abroad and Export
Processing Zones (EPZs) are keeping the country's
building sector afloat. Only they can afford mounting
costs. End summary.

2. An unpublished study reveals that Zimbabweans abroad
are funding two-thirds of residential building, according
to Construction Industry of Zimbabwe CEO Martin
Chingaira. In Harare, their share of residential
construction is even higher. Chingaira claims only
Zimbabweans earning foreign exchange can afford
hyperinflationary increases in building materials. The
price of 50-kgs of cement has risen from Z$575 to 21,000
since February. Due to the near-collapse of the National
Railway of Zimbabwe, trucks now transport most heavy
materials, causing prices to outpace inflation. Most
builders now require upfront payment for all materials
within 24 hours of estimate.

3. Chingaira believes the only other aggressive building
has taken place in EPZs, as export-minded firms hope to
take advantage of Zimbabwe's low cost structure. (Note:
The GOZ recently threatened to rescind EPZ privileges.)

Comment
-------
4. The study underscores a point we have hammered on
frequently: Zimbabwe is becoming a two-class society of
those with and without access to forex. Even working-
class Zimbabweans abroad are building future abodes in
Harare's best neighborhoods. Others are building more
modest houses for themselves and their relatives. Of
course, the forex-starved GOZ is aware of and hoping to
tax these inflows - easier said than done.

Sullivan

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