Zim companies uncompetitive: Chinamasa

via Zim companies uncompetitive: Chinamasa – DailyNews Live 25 January 2015

HARARE – Finance minister Patrick Chinamasa says Zimbabwean companies are repelling foreign investors due to their uncompetitiveness.

“For the past few years I have been engaging with various investors from different countries and they have all repeatedly said local companies are unattractive for investment because there are no new ideas being generated in the economy to support them,” he told industrialists at the Confederation of Zimbabwe Industries 2015 Economic Outlook Symposium on Thursday.

Chinamasa said last year he met fund managers from Europe, Canada and the United States who expressed concern over the non-performance of most counters on the Zimbabwe Stock Exchange.

“Fund managers prefer to invest in running businesses, but after assessing the ZSE they noted that there were only a few counters trading and they didn’t see any new offerings any time soon,” he added.

There are 73 companies listed on Zimbabwe’s industrial index, which has dropped 12 percent over the past six months and 19 percent over the past year

The equities market took a knock soon after the July 2013 harmonised elections and since then has struggled to find traction.

The slower economic growth projected for 2015 and the disappointing 201 and 2013 earnings have contributed to weakening stock prices across the board.

Market experts say the equities market has also been affected by delistings and suspensions which peaked in 2014 as companies faced mounting viability challenges.

Chinamasa said Norwegian investors who were in the country this week said didn’t find any company worthy investing in.

“I have also observed that companies whose leadership has failed “to do the right thing” have been struggling. Leadership has failed to adapt to the dynamic environment where competitiveness is the name of the game. And competitiveness can only be achieved if and only if, the leadership is pragmatic about the company’s cost structures, especially wages, gearing levels, procurement and production systems,” he said.

The Finance minister noted that a high cost base triggers and perpetuates a vicious cycle.

Your products become less competitive, you lose your customers, while on the other hand huge fixed overheads are silently bleeding your business,” he added.

Economic analysts however said the country is struggling to attract investment despite holding the world’s second-largest chrome and platinum reserves, partly due to policy uncertainty related to its indigenisation laws, which are meant to give black Zimbabweans control of businesses.

Presenting the 2015 national budget statement last year Chinamasa said urgent injection of fresh capital was critical towards resuscitating ailing industries whose capacity utilisation has dropped by three percent from 39 percent to 36 percent, according to the Confederation of Zimbabwe Industries (CZI) survey.

The minister reported that 2 130 firms closed shop in 2011 and left 19 121 workers stranded.

He said in 2012 a total of 1,468 companies also shut down and rendered about 20,825 workers jobless.

In 2013 878 firms also collapsed and offloaded 14 499 workers. While last year 134 companies closed shop leaving 928 destitute. Altogether the minister said 4 610 companies have collapsed since 2011, leaving 55 443 workers stranded.

“Fresh capital injection is needed for retooling, overhaul of antiquated machinery and recapitalisation to ensure we resuscitate our industry,” he said.

The minister said part of the measures to revive industry bordered around clarification of indigenisation regulations, removing bottlenecks around the ease of doing business, reviewing pricing and labour impediments and attracting increased foreign direct investment.

COMMENTS

WORDPRESS: 9
  • comment-avatar
    Paddy 7 years ago

    Oh wow!! Geez let’s all think about what the main cause of that being so is hey Patrick?

    I come here with no clever business ideas but logic even to the most devout of ZANU supporters should concede their leaders need to be removed. But being human and as greediness being selfish I guess that’s as a hoping that shumba ichatanga kudya mashizha emiti.

    These old madharas have messed up our generation with their greed. Kana pane ane makore anguwo (30) this year and aneta nevanhu ava please let’s stop being”educated zimbos” and rid ourselves of these thiefs, MURDERERS and start rebuilding our country.

    We been playing to their whims since amen varume.And clearly waiting for a political Messiah muno is a no brainer.. Ehe hapana anoda kurohwa kana kufa but Cmon hey TILL WHEN SHALL REVOLT????? TILL WHEN?

  • comment-avatar
    Paddy 7 years ago

    may I know why my comment is not showing????

  • comment-avatar
    chemutengure 7 years ago

    Finance minister Cde Chinamasa, you seem to be part of the problem judging from your comment about local companies. To be honest you a doing a disservice by alluding to the fact you say you have heard from investors, this comping from a finance minister leaves a lot to be desired. The actual truth is, Mr Chinamasa, “There is no freedom of speech in your so called country and therefore ordinary people can not discuss ideas openly without crossing your kangaroo court laws”. Therefore, it goes without saying that your assessment might a wrong truth.

  • comment-avatar
    Rodlin Mvelase 7 years ago

    “For the past few years I have been engaging with various investors from
    different countries and they have all repeatedly said local companies are
    unattractive for investment because there are no new ideas being generated in the economy to support
    them,” he told industrialists.
    For is lacking in new ideas to support investment and the economy is Zanu puff government. As long as you and your Mugabe are so obstinate no investor will bring their money into a bottomless pit. Come to reality and get out of your nightmares. Government policies do not promote any form of investment, foreign or local. Even your Eastern friends are hesitant to bring investment because of Zanu’s unpredictability.
    Stop fooling yourself because the rational sane people are not fooled by your empty policies.

  • comment-avatar
    Swagman 7 years ago

    Would you invest in ‘Graceland’ with
    the anti-business climate, massive
    bureaucracy and pathetic Government.
    I think not!

  • comment-avatar
    wensil 7 years ago

    A vain attempt to shift the blame to somebody else. Why not look at yourself Mr Chinamasa first and ask yourself who would be foolish enough to invest into such a corrupt environment where there is no law to protect any investment. Zimbabwe is not the only country seeking investors and each country has to work hard to attract investment.

  • comment-avatar
    Nyoni 7 years ago

    There is merely no effort to encourage investment by Zanu . None whatsoever.

  • comment-avatar
    Tiger Shona 7 years ago

    Yes Mr. Nyoni, they act like they are interested, but they only pay lib service to it.

  • comment-avatar

    I always wonder what kind of drugs these guys are on? Or are they just naturally insane?

    The Chinese don’t want to invest because of corruption (that makes you think!) and no one else wants to invest not only because of corruption but also because of the insane “indigenisation” waffle. A friend has just closed his business that employed quite a few people, because he was targeted by “connected” thugs in an extortion racket.

    I hope someone forwards my comments to Cde Patsy!