via Zim must start believing, again – The Zimbabwe Independent January 24, 2014
Big business is dying. Corporates are caught in a negative flux in which they have been forced to downsize their operations or to apply for liquidation. There is resizing across all sectors and retrenchment is the new game in town.
These are signs of an economy heading towards a precipice.
Equity investors are in a difficult situation. The Zimbabwe Stock Exchange has been in a free-fall forever and is fast losing value.
The bourse is losing its lustre in the region and the bad news is far from over. Apart from macro-economic troubles like the slowing economic growth and mounting budget deficit, a sharp decline in capacity utilisation in industry, company closures and the attendant increase in unemployment, have of late opened up another avenue of woes for Zimbabwe.
The stock exchange is often a mirror of the whole economy and investors use the quality of listed counters as a key measure to determine whether or not to invest in a country.
The country is currently witnessing companies not only dropping off from the exchange, but stocks of the bulk of those that have remained on the bourse are not trading at all. Many of them do not deserve to be listed and will be forced to delist.
Trade has remained concentrated in the top five listed companies which now account for almost 75% of the bourse’s turnover.
With no new money coming into this economy, red lights have already started to flash on the government revenue board. This week the Zimbabwe Revenue Authority (Zimra) announced revenues for the last quarter were at US$877,6 million; 18% short of the projected US$1,1 billion.
Zimra said collections from corporate tax were dwindling due to “reduction in industrial capacity utilisation from 44,6% in 2012 to 36,6% in 2013” and the “general economic slump which has limited expansion of business towards income generation”.
The forecast for 2014 is not looking good as Zimra expects revenue to drop significantly this year if the current environment persists. In the face of falling revenues, government has agreed to adjust civil servants’ wages, a further burden to the fiscus. To get more revenue, the state will seek to tax corporates and individuals more to feed the bureaucratic beast.
This discordant refrain appears unending as Zimra, in its half-year results last year, said the first half of 2013 had seen the Zimbabwean economy being characterised by “liquidity constraints, power shortages, retrenchments, scaling down of operations and company closures, among many challenges”.
Nothing much has changed since then and in fact the situation is deteriorating by the day as reflected by activities on the ground.
These cost-cutting efforts are impacting on businesses, both big and small, which provide the goods and services used by the big manufacturer resulting in further contraction down the chain. More worryingly is the debt trap which has ensnared most corporates.
It’s time to adopt confidence-building measures like reviving the honest dialogue among all stakeholders to remove uncertainties. There is a real need to reduce misperceptions and mistrust and increase confidence between state and non-state players. Zimbabweans should start believing in themselves again.
COMMENTS
In the midst of all this, ZESA is borrowing millions from Afreximbank to buy prepaid meters. The money will straight to China in exchange for the meters.
The meters will be used to collect money from Zimbabweans and the money remitted again to China and Egypt to pay the debt and interest. Absolutely no benefit to Zimbabwe but just a cash till for other countries. A visionary country would have crafted a long term vision that would have known that by this time, prepaid meters would be needed and local manufacturers would have had enough time to make the product. As it stands, ZESA and Energy Ministry officials will earn commissions for the imports and the result is massive haemorridge of the economy with a few officials appearing rich! This is business in the present day Zimbabwe. Will see where it will take the nation… but soon, the youths with degrees but no jobs will act.
With mugabe&co in situe Zimbabwe is going nowhere, other than down the tubes, and no amount of Zimbabweans believing in themselves is going to change that.
MikeH with all due respect the world is evolving. The reason it evolves is because people are saying no to Dictatorship, no to child abuse, no to torture, no to racism, no to tribalism. Africa like the rest of the world will go the full circle. Weather we see this, does it really matter? The human instinct is survival. I am not a young man. I fight for my grandchildren and Great grand children not born yet. Why would you want to be so negative now? I also fight that the coming generation does not see colour race or tribe. Guess what MikeH…IT HAS ALREADY STARTED. They school together. They sport together. They are the future we fight for.
confidence is built on something….there is nothing to build confidence onto in Zim at the moment , because the government interferes in everything for its own greed and power games.
All problems in this country are self made. We have a leadership vacuum. Our nonagenarian leader is sick and in any case, at that age his attention to detail is similar to that of a 2 year old. He is fighting demons from his past. At international fora, whilst other leaders discuss progress, he throws insults at people. He has surrounded himself with greedy, self serving people. We need a respectable figurehead. We need a leader capable of steering the nation and restoring our national pride. A leader above obscene and fray language. One almost thinks even Cde Chinotimba would do a better job.
Zombi I Don’t know about Chinos doing any better, but I suspect that the Zimbabwean people will prevail. One of the contributors talked about a snake biting itself. This is happening already. We have to hope and pray that when the poison finally has it’s reward there are people waiting in the wings to steady the ship. This is what these discussions must be about.
Zimbabwe unquestionably possesses enormous human talent, people who have the capability of turning things right around and making us a prosperous and happy country. Sadly though nearly all such talent fails to realize anywhere near their full potential simply because of severe frustrations associated with the disgraceful management of Government and our resources. Slowly but surely people are beginning to realize the truth and beginning to challenge this devious and corrupt system which has so adversely affected all our lives. If we want to realize our dreams and end this oppression then all of us need to possess the courage to speak up and take action against those who continue to frustrate us and deny us our basic human rights.
Zimbabweans must fight to liberate themselves
Ephrain Gumbo I would sit down with you and have a drink. My brother it is people like you that are keeping Zimbabwe alive. You have spoken a lot of sense. This is how we continue. I don’t know if as a young man you followed the story PILGRIMS PROGRESS. If you have not try to get this book .This is the preview…
Pilgrim’s Progress is a great work of Christian literature. Originally composed in the 17th century, this spiritual allegory has entertained and delighted innumerous readers for over 300 years. Part I tells of “Christian” and his journey to “Celestial City;” Part II tells of the journey of Christian’s wife Christiana and their children to Celestial City. The two parts work together as a unified whole, which describes and depicts the believer’s life and struggles. Indeed, given the easy style of the book, readers of all ages can understand the spiritual significance of the depictions in the story. However, Pilgrim’s Progress does not simply instruct readers with spiritual allegories; it entertains them as well, through Bunyan’s creative story telling. Enjoyable and spiritually instructive, Pilgrim’s Progress is highly recommended.
We will progress.
Doctor do little as of now I am no longer Povo Pete. I am now Pilgrim. Thank you.
Povo. I mean Pilgrim you’re welcome.
I believe people have lost so much faith in the future because of whats already happened. We have lost our will to fight back. The truth is how long do we wait, and ultimately what are we waiting for? There will be nothing left to keep this country going financially. People think that somebody will come and rescue us! NOT! Mugabe and ZPF have never ever given any thought as to the plight of the people. If anyone thinks of taking a stand they are beaten down or just disappear. The people unfortunately do not have the backbone to rise. Mugabe made sure his security was in place from day one. Its the African way to respect that the chief has supreme power and rule over everything. When Mugabe says my Zimbabwe, he means MY PROPERTY in all of the sense. Black Africans know this to be so. Mugabe and ZPF must go, but the mind set of the people must change. The future government must be responsible and accountable. Corruption seems to be an African way, whereby anyone understands that doing business here would need a bribe or two! This must end and people must realise hard work is the only way forward.
Thirty four years of unbroken failure – what an amazing record! Zim can never recover until such time as The Mafia (Zanooo)n is eliminated, root and branch. It has never been anything more than a Criminal Organisation. EVERY intelligent Zimbabwean knows that. Under ZPF Zim is heading for . . . Somalia