Zimbabwe's infrastructure upgrade halted

By:
Bill Boyle
Published on:

The Zimbabwean Government has impounded the cash earmarked to help develop and support telecommunications infrastructure in remote areas, claiming it will now be used for broadcast digitisation

The struggling Zimbabwean Government has impounded the Universal Services Fund (USF), which was set up to help develop and support telecommunications infrastructure in remote areas, and has declared that it will use the money to fund the digitalisation program for the state broadcaster instead.

Finance Minister Patrick Chinamasa said: “Implementation of the Digitalisation Migration Project, which started in February 2015, has been facing funding challenges," and that progress had halted.

Only US$30 million of the US$172.9 million required has so far been disbursed. Zimbabwe continues to face a series of cash crisis have left the economy crippled and almost certain to miss it’s already low growth projection of 1.2% in 2016.

Authorities have now allocated resources from the USF to fund the broadcasting digitalisation

"The government will facilitate implementation of the project with funding drawn from the Universal Services Fund, to be reimbursed once the resources have been mobilised from the market," Chinamasa said in his 2016 midterm budget statement.

Initially, the project was supposed to have been funded by the Broadcasting Fund, using cash made from the migration from analogue to digital.

The crisis was compounded by the Broadcasting Authority of Zimbabwe selling the spectrum for US$200 million to Net-One (which is a state-owned telecom company) which failed to pay the asking price.

As a result the government decided to dispose of the spectrum to other players, although there have been no further details on how this sale will work.

Telecommunications companies contribute into the USF through a 1.5% tax. Econet has claimed that it has contributed as much as US$59 million into the fund during the period March 2009 to November 2015.

While infrastructure constructed using the fund is supposed to be shared by all operators Econet Wireless has demanded that the Posts and Telecommunications Regulatory Authority of Zimbabwe (Potraz) disclose how it has been utilising funds from the USF.

Chinamasa has been reported as saying said the Ministry of ICT will handle the fresh disposal of spectrum for digital broadcasting.