Companies risk folding — Chinamasa

via Companies risk folding — Chinamasa – The Zimbabwe Independent September 11, 2014 by Taurai Mangudhla

The country’s economic outlook remains bleak amid fears more companies will fold due to current problems, Finance Minister Patrick Chinamasa has warned.

At a Zimpapers breakfast meeting held in the capital this week to unpack President Robert Mugabe’s recent visit to China, Chinamasa said the international community was only warming up to funding infrastructure projects, shunning economic rescue packages.

He warned companies to address their cost structures to survive.

Chinamasa said failure to address cost structures would result in companies sinking, adding the current wage levels were unsustainable given a generally low productivity level obtaining in the country.

After a series of visits to unlock funding and investment from China, Chinamasa said significant progress had been made in respect of mega infrastructure projects, but securing support to the productive sector remains a big challenge.

“My biggest challenge at the moment, and we are working on it, is support to the productive sectors at affordable interest rates; that is my biggest challenge,” he said.

“What we need here is foreign direct investment which grows your taxes but currently, because of sanctions, we have got a challenge which is why we can only fund whatever we are doing through loans and the European Union has promised to lift sanctions in November. So far in anticipation of the lifting of sanctions we are already in discussions with the EU to see what we need to do.”

Zimbabwe has failed to attract meaningful funding to capitalise its ailing industry after a hyperinflation and economic meltdown.

Foreign investors have adopted a wait-and-see attitude towards Zimbabwe at a time industry needs to retool and match international competition which is producing better quality products at cheaper prices.

The country’s sovereign risk rating is among the highest in the world, resulting in higher interest bearing loans. The country also has poor credit rating.

Economist Takunda Mugaga told businessdigest that Zimbabwe is viewed as a bad investment destination largely because of its poor record on governance and policy inconsistencies, including lack of respect for property rights.

Apart from the governance deficit and lack of policy consistency, the country owed US$9,9 billion to domestic and international creditors as of December 2013. Zimbabwe’s banking sector is saddled with non-performing loans which have risen to 18,5% as at June 30 2014 from 15,9% as at December 31 2013 due to challenging economic conditions and increasing cost of doing business.

Part of government’s efforts include formation of a debt management office to help monitor and clear government debt which stood at a combined US$9,9 billion as of December 2013, 54% of the country’s gross domestic product in 2013.

Chinamasa said internally, government was trying to address fundamental macroeconomic issues that are of concern in partnership with the Reserve Bank of Zimbabwe.

He said government was working with China to ensure private Zimbabwean businesses can access funding directly from Chinese banks.

“We have done quite some work already on the Zimbabwe Stock Exchange by demutualisation,” Chinamasa said.

He said government has agreed to make token repayments to China and other international funding institutions as a demonstration of its willingness to restore relations in order to unlock new funding.

“We have so far coughed up more than US$180 million which was not in the budget just to make ourselves look good not only with China Exim bank but also Sinosure because you cannot access any funding from China if it’s not insured by Sinosure,” Chinamasa said.

Chinamasa said his office would present a Debt Resolution Strategy in a few weeks with a view to adopt a clear strategy on clearing Zimbabwe’s debt which remains an albatross on the economy and inhibits inflow of fresh capital.

In an update of government’s recent visit to China, Chinamasa said the Chinese government promised the President Robert Mugabe-led delegation it would fund infrastructure projects.

He said the main projects include expansion of Kariba South expansion and Hwange Thermal Power Station rehabilitation.

On telecoms, he said a US$219 million loan facility was signed for NetOne to expand its network whilst another US$98 million is in the pipeline for expansion of TelOne’s fibre optic internet infrastructure.


  • comment-avatar

    The only EU “sanctions,” remaining are the shopping bans on Mugabe and DisGrace. If Chinamasa thinks that once the EU drops that “sanction,” then he’s CRA-CRA! The reason no one wants to invest in Zim is because of the indigenization law, the farm invasions and the crooked judiciary. The fact that Mugabe has stolen several elections to stay in power isn’t very comforting to investors either.

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    Gushaz 8 years ago

    Mr Chinamasa there is no need to hide behind sanctions. Ok if they are lifted do you think they will pour in their money in a risk country like Zimbabwe while your all wheather friends China has failed to trust you with the few millions that you are struggling to pay off. Why waste money on non productive activities like sponsoring thugs to kill fellow country man and woman, hiring Nikiv to rig elections, taking a dying old president for an eye check up in Asia. If I may ask you Mr Chinamasa how many billions that you zanu pf idiots have put on offshore accounts. These countries that you intend to go and borrow from know how much you idiots have in offshore accounts, they will simply ask themselves a simple question why keeping money in offshore while they are leaders of the country. Mr Chinamasa dont try to provoke people. Kunyara handi kupusa and that also does not mean we like or respect you. kana matadza siirai vanoziva stop wasting money going to elections while you know the results of the elections before they are done. Whom are you fooling. Time will tell. It shall be dog eat dog within your own party no one will come to liberate us from you, but you shall lead us from liberate us from your yoke. We welcome the explosive bomb that you have introduced in your party.

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    Chaka 8 years ago

    So, no more costly trips to China by China-masa

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    JRR56 8 years ago

    TRhe culture of money for nothing created by Zanu ministers and followers has left the country with an unproductive work force that is going to take a generation or longer to overcome. Zim will be in the doldruma for nany many years to come. This is Mugabe’s legacy to the country!

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      bingo wajakata 8 years ago

      You can say that again. Mugabe’s legacy is that of destruction and murder. Needless to say once he dies even some of those who were calling him Jesus will profess to not even knowing him but the ordinary person shall not forget what Mugabe and his bunch of crooks have done.

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    Fundani Moto 8 years ago

    This “sanctions” mantra is simply too dumb to comprehend. Those who were around in 1965 – 1966 will remember the Universal sanctions that were imposed by the United Nations upon the Smith regime. The end-result of those sanctions was a stronger and more sophisticated home-grown industry. This country began to manufacture and refine its products. How have “targeted” sanctions affected our industry? People should learn to admit their failures instead of crying victim for no reason.

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    WeMatongo 8 years ago

    scoundrels of the first order. china-masa look at your self no shame. munhu wamavhu

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    peter tosh 8 years ago

    Stop lying about sanctions you idiot Chinamasa, your own stupid war vets and militia don’t believe that rhetoric anymore. I have all you fat cats for misleading the country yet you are busy stealing hiding behind sanctions.

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    peter tosh 8 years ago

    Meant to say I hate.

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    Jono Austin 8 years ago

    Lifting sanctions to Chinamasa means that Europe and America must gift to Zimbabwe (Ministers Swiss bank accounts) billions of dollars with ZERO accountability by Zimbabwe and absolutely no benefit to Europe and USA. That is what ‘lifting’ sanctions means to these incredibly stupid and oafish people.

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    Mlimo 8 years ago

    The joke called zanupf continues hilarious

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    mark longhurst 8 years ago

    Only one reason you failed to raise capital—–NO-ONE trusts anyone in Zanu pf ,anywhere in the world, only the Chinese will sup with the devil and even then they do it with a suspicious view.

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    Doris 8 years ago

    Companies risk folding? A….hole! They have already folded. And that is why, Mr. A….hole, there is 95% unemployment. Duh!!

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    Chiwoniso D 8 years ago

    Gushaz, you are spoton. Its high time Zpf chefs should be told the truth they know. “Bring back the money in your offshore accounts. Whats the motive of you buying properties in SA & other countries instead of investing here? What was the $9.9 billion debt used for? China-masa open up the old records and tell us what your predecesors used it for “. Fellow countrymen, these zpf guys borrowed money and externalised, fearing that one day they would be chased away coz of gukurahundi & other bad things they did as govt. Now they want to full us singing sanctions, sanctions; blue lies. Countrymen, lets tell the rural people the truth, especially charumbira and his chiefs. Lets use any means at our disposal to open up people’s minds about this fraud by zpf chefs. The West is aware of all these & thats why they no longer want to invest in Zimbabwe. “God please help zimbabwe”.

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    “My biggest challenge at the moment, WHY ARE AFRICANS ALLWAYS SO CHALLENGED???? NO MATTER HOW SIMPLE THE TASK????

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    Garikai 8 years ago

    Chisina musoro Chinamasa shut up about the fictitious sanctions. You do NOT need EU, China or Obama to help you grow maize, sunflowers etc. Rhodesia and South Africa grew remarkably under sanctions. Your silos are empty not because of sanctions but your stupid politics and policies. You better resign Chinamhata, you are going nowhere. You bunch of ZANU isina pfungwa you have completely lost focus.

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    But Patrick you just said that you were going to go ahead with the taking of more farms. What do you expect? Its not the EU and the West that are your problem but God’s judgment. Repent! And then will come restoration. That is a message for all of us!

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    ivor payne 8 years ago

    Chinamasa tell industry to reduce its production costs, says his biggest challenge is to support the productive sector…..and then hikes the price of fuel????

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    Mandevu 8 years ago

    Oh come on Chinamasa, everyone knows that it has nothing to do with sanctions, so please stop trying to pass the blame. It is your own policies that are doing the damage. Your government is becoming the laughing stock of the world – can’t you see this? For goodness sake lets get some decent economic dialogue happening in this country

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    Edna Msika 8 years ago

    SANCTIONS????? The only sanction that should matter is asking Zanu PF members to sanction their mouths. Who would want to throw money into a country where there is no accountability and continued rhetoric that whites must leave and no black should do business with whites. The people left here are ZIMBABWEAN. Black and white are jobless – that has nothing to do with Sanctions and everything to do with avarice and greedy minister stealing and pilfering all that the rest of Zimbabwe should have access to. Who are driving the posh fancy cars? who owns houses along Folly John Crescent? Certainly not normal Zimbos, only wealthy Zanu PF Ministers. Sanctions – what a crock of S%$T.

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    Anhuwee ngatibwereekete diko,The current polices we had here in zimbabwe are real sanctions to us.We should sit down and review or abolish this polices unless we perish for good.we appreciate the sacrifice made by our fore fathers during liberation struggle ,but lets not keeping on stuck in the past ,lets move foward.bringing in consistent polices for the economy to bloome regardless of which political party one belong,AN EXAMPLE was set by the gvt of national unity

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    Mukanya 8 years ago

    Even The ZIM-CORRUPTION industry faces closure so says CHINA-MASA

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    nyoni 8 years ago

    ZANU A@??*HOLES YOU ALONE CREATED THE PROBLEMS WE FACE NOW. Simply die off you useless morons.

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    Mugabe: We will create 2.2 million jobs over the next 5 years
    Chinamasa: Companies risk folding

    Honestly, the laughs i have from reading what these plonkers have to say on a daily/weekly basis makes my day.

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      Edna Msika 8 years ago

      They say the complete opposite every time one of them opens their mouths. Definitely farcical.

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    Bazur Wa Kumuzi 8 years ago

    Chiwoniso D not only the rural. We must tell everyone including the greedy educated ones who are receiving other people’s properties now. But true let us spread the message and then be ready for the ultimate sacrifice. There is no other way. No one will do it for us. Loitering in the streets of South Africa wont help. Going to the UK, USA or Australia only to be “better” than our fellow neighbors or relatives does not help. We have one home and that is this country. Refusing to accept that we all have a responsibility to shape our own destiny is our enemy.

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    Expat 8 years ago

    Unfortunately for Zim China & the West are on the same page on a number of issues and finding common ground within the modern World despite their differences in ideology. One of the things they have an understanding on is ‘Zimbabwe’, China one way or another respects the views of the West on ‘OUR’ Country and will not encourage the current disposition to continue. Citizens of Zimbabwe watch what happens if the current bunch of morons move out of the way and allow some Patriotic leaders that implement some reasonable policies and the so called sanctions will evaporate. (Reality is, its called self imposed sanctions)

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    Zim Patriot 8 years ago

    its easy comrades! thou shall not steal elections, farms, businesses, jobs(when u steal a farm u not only stealing farm but workers jobs and those working at other agro related companies, our natural resources, these Chinese companies in partnership with local fat cats and chefs, so in essence we the people of Zimbabwe are being stolen from in every aspect of our lives…..pray Comrades pray to the Lord Jesus Christ for deliverance from thieves and murderers disguised in smart cars and designer suits who own double and triple story mansions and plead poverty hiding behind sanctions!!!!!!! Only the good Lord can deliver us once our whole nation turn to HIM for help. He is our refuge and deliverer. We Praise and Honour YOU Almighty God!!!!Read in Micah 2 from the Holy Bible what sorrow befalls the people who steal anothers field and house…….we rest and wait in YOU LORD