Home » General » Harare’s CBD Crisis [editorial]

ELSEWHERE in this issue, we carry an article about Pearl Properties’ plans to turn its office properties in Harare’s central business district (CBD) into residential apartments.The reason for this is that there are no takers for office space because the economy has turned into a corporate graveyard: Companies that thrived before the new millennium have collapsed, largely due to the way we have managed our economy since resorting to a chaotic land redistribution programme in 2000.

Many buildings are vacant the only space with a ready market is retail space for shops, but moving across the city, it is clear that over the past decade, when Zimbabwe turned into a trading economy, after the collapse of the productive sectors, about every building turned ground floor space into a shop for letting.

There is now an oversupply of shopping space, and this has been worsened by the fact that thousands of jobless Zimbabweans have resorted to vending, invading pavements in the CBD and competing with shops. As a result, the pavement vendors are being blamed for the current woes.

The truth is, not all of these shops are formal businesses in the strictest sense they are quasi informal businesses benefitting from smuggled goods, and their workers are not on the compulsory national pension scheme or the country’s tax collector’s register.

But that’s not the point. The point is that Zimbabwe’s economy is on its knees, and this has been reflected by the decline in Harare’s CBD.

For those who have watched developments in South Africa closely, this is almost akin to the decline of Johannesburg’s inner city, which coincided with democracy in 1994. Except the circumstances are different.

Many South African companies deserted Johannesburg’s inner city due to increasing concerns for safety and deterioration of the CBD.

Most of Johannesburg’s abandoned inner city buildings are now being turned into residential accommodation. Many had been condemned, and many appear like ghost houses.

But what happened to Johannesburg’s inner city makes what has happened in Harare look like a tickle. But the truth is, this trend is unstoppable and we fear for those who still have faith in Harare’s inner city. Any turnaround for the decrepit structures will require huge investments, and many investors are likely to be persuaded to start from elsewhere when boom visits the country. They will probably go to Mt Hampden, which government is planning to turn into New Harare City, or move to the environs of the CBD, which many companies had already started doing anyway.

We don’t expect Harare City to file for bankruptcy the way the city of Detroit did in 2013 due to an exodus of manufacturing concerns, but the sceptics among us are bracing for the worst.

The pavement traders cannot surely be the reason for the woes afflicting our CBD landlords.

There is a deeper crisis that needs attending to.

Source : Financial Gazette