By Ryan Chigoche
Finance, Economic Development and Investment Promotion Minister Professor Mthuli Ncube last week said the government had begun discussions with China Railway on resource-linked financing instruments following meetings at the World Economic Forum in Dalian. The arrangement would use future mineral investment proceeds, together with toll revenues, to finance infrastructure development.
For Zimbabwe, the logic is compelling.
The country requires an estimated US$34 billion to rehabilitate roads, railways, energy, and water infrastructure, while constrained access to international capital markets limits conventional borrowing options. With one of Africa’s richest endowments of lithium, platinum, chrome, gold, and coal, using mineral wealth to unlock infrastructure finance appears an attractive proposition.
The mining industry, which depends heavily on efficient transport networks, could be among the biggest beneficiaries.
Years of underinvestment have left the National Railways of Zimbabwe operating well below capacity, forcing mining companies to move increasing volumes of bulk minerals by road at significantly higher cost. For a government pursuing mineral beneficiation and value addition, improving logistics could prove just as important as building processing plants.
Yet history suggests that resource-backed infrastructure deals are neither guaranteed successes nor inevitable failures.
Across Africa, such arrangements have enabled governments to undertake projects that may otherwise have remained beyond their financial reach. At the same time, they have exposed countries to risks ranging from opaque contract terms and fluctuating commodity prices to disputes over whether the infrastructure delivered represented fair value for the natural resources committed.
The Democratic Republic of Congo’s Sicomines agreement illustrates both sides of the debate.
Signed in 2008, the deal exchanged access to vast copper and cobalt deposits for Chinese-funded infrastructure. While roads, hospitals, and other projects were delivered, the agreement later became the subject of intense scrutiny, prompting renegotiations after Congolese authorities argued the infrastructure fell short of the value generated from the country’s mineral resources.
The lesson for Zimbabwe is not that resource-backed financing should be avoided. Rather, it is that the structure of the agreement matters as much as the financing itself.
Infrastructure economists generally argue that such deals produce the best outcomes when mineral assets are independently valued, repayment obligations are transparent, infrastructure commitments are clearly defined, and procurement is subject to public oversight. Without those safeguards, governments risk sacrificing long-term resource value for projects that fail to generate lasting economic benefits.
Zimbabwe enters these discussions from a stronger position than many countries did two decades ago. It can draw on African experience, stronger international standards on resource governance, and a better understanding of how commodity cycles affect long-term financing arrangements.
The timing is also significant. Chinese investment in Zimbabwe’s mining industry has accelerated over the past five years, particularly in lithium, while government policies increasingly require minerals to be processed locally before export. Efficient transport infrastructure would support both objectives by lowering logistics costs and improving the competitiveness of value-added mineral exports.
Ultimately, the debate is not whether Zimbabwe should use its mineral wealth to finance development. Many resource-rich nations have done so. The more important question is whether any future agreement ensures that infrastructure creates lasting economic value without compromising the country’s long-term interests.
If negotiated transparently and supported by strong governance, mineral-backed financing could become a catalyst for industrialisation and mining growth. If not, Zimbabwe risks discovering that the true cost of today’s infrastructure is measured not in dollars, but in tomorrow’s mineral wealth.
