Business loses confidence in Mnangagwa

Business loses confidence in Mnangagwa

Source: Business loses confidence in Mnangagwa – NewsDay Zimbabwe May 25, 2018

THE business community appears to have lost confidence in President Emmerson Mnangagwa’s new political dispensation, with the latest Confederation of Zimbabwe Industries (CZI)’s composite Business Confidence Index (BCI) indicating a negative trajectory, particularly in the first quarter of this year.

BY TATIRA ZWINOIRA

Since he took over levers of power in November last year, Mnangagwa’s administration had been riding on a wave of optimism, but the pessimism later cripped in following the regime’s failure to resolve the cash crisis, with industry battling to source foreign currency to import raw materials.

Announcing the BCI results in Harare yesterday, CZI president Sifelani Jabangwe said the composite Business Confidence Index for the first quarter of 2018 stood at minus 14,4 for quarter-on-quarter basis and 20,9 for a year-on-year.

“This indicates lack of confidence and pessimism of business leaders for quarter-on-quarter business condition, but optimism of business leaders regarding the year-on-year economic situation,” he said.

Jabangwe told NewsDay that all the manufacturers that they surveyed complained mostly about the difficulty in getting foreign currency.

“What motivated this pessimistic result was that most manufacturers have been failing to get foreign currency for their operations to a point where their production has been greatly affected. Almost every manufacturer we surveyed complained that they were receiving little or no foreign currency so I would say it has been mainly due to foreign currency shortages,” he added.

The negative result recorded in the BCI was on a quarter-on-quarter basis against the last quarter of 2017 while the BCI year on year result was 20,9 showing an improvement compared to the first quarter of 2017.

This comes as foreign currency has remained scarce in the first quarter due to a lack of foreign investment and low exports based on low production.

Manufacturers need between $250 million and $500 million in capital to retool and increase production.

Recently, British American Tobacco described their particular situation as “drier” than other first quarters in getting forex.

Under the BCI, the Situation Diffusion Index was minus 12,2 for a quarter-on-quarter comparison and 4,5 for year-on-year comparison showing business leaders felt that the situation was worse off in the first quarter of 2018. This was compared to the previous quarter in 2017.

COMMENTS

WORDPRESS: 4
  • comment-avatar

    BAT will probably be ‘drier’ until the next rains, however, for now their situation is probably ‘dire’?

  • comment-avatar
    Dave Wood 6 months ago

    You ALL have it wrong…bring back white folk, period!!!! And the country will rise out of the ashes to become another African powerhouse within a decade of them kickstarting the economy!!!! If you don’t the fire will eventually go out!

  • comment-avatar
    mazano rewayi 6 months ago

    Folks, we are flogging a dead horse. We need a paradigm shift – new thinking, new ways of doing things – just start afresh. our production systems are archaic and the products from there will never be competitive so no amount of money to our industries will save them. Our policies and systems are anti-entrepreneurship and pro-corruption. our finance systems are divorced from the economic realities of our people. and we have nothing unique to sell to the world. On top of all this we entrust school drop-outs to craft national policies. we place people who never ran a tuck shop to run our cabinet. No wonder everyone else just promises us money then watches us celebrate whilst no cent ever arrives – ours is a kindergarten play passing off as a king’s court. The problem is we believe this circus! Let’s get real, we have not started.