Victoria Ruzvidzo Business Focus
In some cases there is trepidation and fear as regards the performance of the economy in the next six months while in others there is so much hope that the winter months in the economy are almost over
Both sides present points of value that need to be noted and acted upon. The Global Rankings released at the World Economic Forum on Africa recently saw Zimbabwe jump seven places up the ladder, a good indication that this country is not sinking further but is actually swimming towards the positive territory.
Of course, we may be accused of celebrating too early because we are still ranked 121 out of 144, which means we occupy an uncomfortable place but some of us are of the view that any positive change, no matter how small, is worth celebrating.
Isn’t the Chinese have a saying that a journey of a thousand miles begin with one step. That step may be small but you will be heading towards your destination.
It’s always a question of whether the glass is half empty or half full. Both assumptions are correct but one tends to re-energise you while the other usurps the energy to soldier on.
This week I would like to give space to thoughts by various economic commentators and industrialists regarding their views and thoughts on the economy now and over the next six months.
Dairibord Zimbabwe Holdings Group chief executive Mr Anthony Mandiwanza says: “Prospects for the next six months are a little bit depressing. I hear much talk and less doing. We need to fight against corruption and to deal decisively with those that transgress. I like to see . . . fighting corruption.
“Nobody wants to invest in a country infested with corruption. I like to see energy around enablers such as provision of electricity and water. We have spoken about it but let’s do something now.
“I want to see less talk on factionalism because it doesn’t help us, it only detracts us so let’s sober up. What will put bread on the table is not factionalism but real transformation, so let’s talk about that.
“World Bank research has shown that Zimbabwe is number one per capita in terms of resources, on literacy number one or number two in Africa and number 10 in the world so when you have national resources plus literacy which nation can beat you? But how are you harnessing that literacy?
“Above all, we need divine intervention and we should get away from the fear of the unknown.”
Zimbabwe National Chamber of Commerce chief executive Mr Takunda Mugaga had this to say:
“One thing I am happy about is the new shift of mindset to address the issue of competitiveness. You can see how Government is pushing the issue of competitiveness.
“If you look at the last Monetary Policy Statement, its theme was anchored on competitiveness, the same as the National Budget. Other issues of competitiveness we have witnessed are demonetisation.
“This will significantly resuscitate the financial sector and you can see how the Reserve Bank of Zimbabwe Governor Dr John Mangudya is trying to clean up the balance sheet to ensure the financial sector performs well. The RBZ Debt Assumption Bill is now in the public domain.
“This is a milestone. Just assuming that debt means we can now expect the central bank to perform its role in the economy well. We have also noted that the Government is moving in to deal with corruption decisively.
“This is what we need in our economy.
“The audit of the CABS Youth Fund and the land audit to ascertain the farms that are not being utilised is critical.
“As a Chamber we are behind them (Government). This is what we need as a nation. Government has really come out now to say let’s be pragmatic in our approach. As industry we have always talked about this. Going into the second half of the year, the threat has always been that of recurrent expenditure.
“It’s just that Government does not have control of the weather because the $300 million for food imports means Government is going to need a lot of funds to get going in terms of lines of credit.
“On the equities market, the listing of Proplastics a fortnight ago shows that this market is not as dead as we thought it was. There is still belief that the equities market can be a good avenue to raise finance. We actually expect a newcomer in the second half of the year.
“The prospects for this economy are bright. I don’t see the reason why we should be negative. Even for the vendors, the clean-up is painful but necessary.
“As a nation we can’t afford to be negative . . . In fact, the negativity is more of perceptions. In Nigeria the fact that the Abuja Stock Exchange was closed because of Boko Haram was not news but if anything happens here in Zimbabwe at the periphery of some rural area it’s big news.
“If Zimbabwe was South Africa that experienced the xenophobic attacks you would be shocked where we would be today in terms of human rights rankings. But at the end of the day Zimbabwe will remain our identity. It’s everyone’s duty to see that when we talk of Zimbabwe we are talking about our brand.”
BancABC Stockbrokers’ James Chiuta had this to say: “Notwithstanding the liquidity problems the extremely undercapitalised banks are currently facing, we believe the second half outlook of the banking sector is a lot more positive.
“NPLs should continue coming off as banks continue prudently writing off bad loans. In addition, ZAMCO should ramp up the process of picking up bad loans in this half year. Once banks’ balance sheets are freed up a little, we should see a slight increase in liquidity which should have a positive multiplier effect.
“We also look forward to a positive review of the IMF-supported SMP II which should further help attract FDI. Government has been extremely careful to implement most of the tabled resolutions, therefore we are optimistic the IMF will continue to engage them further.
“The trade deficit is likely to reduce significantly following the lifting of the ban on raw chrome exports. The recent reversal of the chrome ore export ban means that exports will likely grow in the face of stagnant imports hence reducing the trade deficit.
“In addition, we should see a sharp increase in job creation as previously closed chrome mines reopen.”
Farai Musanhu had this to say: “Hope u had a good day in the office dear just been reading your article in today’s paper and I agree with you that it is imperative for every Zimbabwean to make the economy tick, what am still to understand though is what the backbone of our economy is.
Save Marukutira from Harare believes: “I will bet my last dollar unless this economy gets serious about addressing our ‘currency dilemma’ we can never get out this economy quandary we find ourselves in.
“I have traced the history of the economies and found out there is no economy that exports and imports in a foreign currency and expect to have positive Terms of Trade (TOT). This directly feeds into a negative balance of trade and inevitably push the high propensity to import.
As we stand we are a “consumer district” for SA products and we shall continue exporting jobs to SA. The nation has to have a multi-stakeholder approach and at least agree in one currency to formally adopt. I know it’s a debate that people choose to hold while they are emotional but it’s worthwhile. N.B. I never recommended for the Zim dollar to return
“I realise you are at the World Economic Forum, I have been watching the debates on CNBC Africa. Why it is our economy seems to be excluded from the mainstream? We seem to have no representation there save for the expatriate professionals representing other foreign companies. My heart bled as I was listening to Ben Magara, Dr Nkosana Moyo and Nathan Kalumbu. How can we tap into this rich experience and expertise of our Diaspora?”
Another analyst said: Business activity is being suffocated by a biting liquidity crunch evidenced by delayed salary payments and failing retail turnover, hence the need to increase productivity in industry and to substantially increase foreign direct investment, more lines of credit required for infrastructure development, increase in productivity and to ease liquidity crunch!
“Company closures and downsizing need to be stopped as this reverses gains made over the past five years and puts massive strain on an already challenged economy, albeit, one that is also showing massive growth potential!
“The serious and committed implementation of Zim-Asset is of paramount importance if we are to achieve the intended and most attainable targets. The informal sector has proved increasingly vital to the economy and more Government support will see this sector thriving. Our economy needs a more productive mining sector as it is our country’s biggest earner of foreign currency.”
In God I Trust!
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