Economic collapse alarms business

HARARE - With the carnage within commerce and industry escalating at a rapid pace, organised business has added its voice to growing calls for political dialogue in the country as the only solution to Zimbabwe’s deepening economic crisis.

Confederation of Zimbabwe Industries (CZI) president Charles Msipa told subscriber-based financial news provider Business Live this week that the only “way out of our situation is a political solution”.

This comes as the country’s economy — which had recovered noticeably from a decade-long meltdown during the country’s coalition government between President Robert Mugabe and former Prime Minister Morgan Tsvangirai — is hurtling towards a mega recession last witnessed in 2008.

Since the country’s disputed elections last year, both local and international investors have withdrawn from the economy in droves, which has seen hundreds of companies shutting down and tens of thousands of critically-needed jobs being lost.

The economy has since this year slid into the much-dreaded deflation zone, with some FROM P1

analysts significantly slashing the country’s 2014 economic growth prospects from the government’s overly optimistic 6,1 percent forecast, to negative territory.

The manufacturing sector is particularly depressed, with official capacity utilisation slumping from 44,9 percent in 2012 to 39,6 percent in 2013.

Msipa said: “Everyone should do their job, politicians must swallow their pride and industry must work on economic solutions so that we save the country,” he said.

Msipa said the dialogue was crucial and had to happen soon.

“No matter how much the ministers and industry work hard, this problem requires input from all leadership quarters,” he said.

His remarks came amid growing calls from the country’s opposition in particular for political engagement and drastic changes in government’s attitudes and policies.

Apart from Tsvangirai himself calling for this kind of necessary dialogue, former finance minister Tendai Biti also told a recent Sapes Trust Policy Dialogue forum that Zimbabwe was in a crisis that required political dialogue.

“The reality of our situation is that Zimbabwe is in a crisis and a deep structural crisis. Crisis of legitimacy, crisis of leadership, crisis of confidence, a structural economic crisis underlined by depression ... they are all coinciding in one place,” he said, adding that “those in leadership need to… come up with a solution,” Biti said.

Official statistics from the Labour ministry indicate that although the number of people who have been retrenched went down from 4 007 in 2012 to 2 376 in 2013, the real situation on the ground is much worse as more companies continue to collapse and to retrench employees.

According to the CZI, the manufacturing sector alone requires about $8 billion for working capital and equipment upgrades, among other pressing needs — funds that are simply unavailable in this market.

As if to ram the point home about the dire state of the Zimbabwean economy, Msipa’s observations came as diversified and “old money” group, Meikles, made the staggering announcement yesterday that it was shutting down its upmarket Greatermans Store and replacing it with Pick n Pay Supermarkets with effect from the end of June this year.

Most Zimbabwean retailers are finding the going very tough due to the prevailing acute liquidity crisis, which is coupled with low disposable incomes.

Retailers also face stiff competition from cheaper imports mainly from China and South Africa.

Greatermans, located in the Harare central business district, and which sells clothing and furniture, has been a major retail player in the country for many decades.

Late last year, Meikles announced plans to make forays into the lower end of the market as part of its strategies to boost revenue and unlock shareholder value in the deteriorating current business climate.

Comments (18)

This is a disaster. And we really are stuffed as a nation. Does anyone care?

Moses - 20 May 2014

MHAI!!!!!!!!!!!!

Oliver Masanjala - 20 May 2014

this is wat u voted for so keep on working hard ,Napoleon is always right

nyambuya - 20 May 2014

Mugabe, who has got an iron fist grip on the country through the brutal state agents, has the following immediate priorities: 1) Put in place measures to ensure his family and businesses are not touched when he dies. 2) Choose a successor who will protect him and his nfellow thugs from trial for crimes against his citizens. Until the above are fulfilled, there is nothing that Mugabe is willing to talk about. The industry and population can all die and he does not care. Alternatively, the only other solution is to remove him by force like Sikhala said at the weekend.

Disaster - 20 May 2014

ZPF's Rugare Gumbo is quoted in one local newspaper as saying,'Dialogue is irrelevant'as ZPF won the July31 elections. We are putting party politics ahead of serious national issues.Surely we need a national dialogue with as many stakeholders as possible to revive the collapsing economy. ZPF's failure is there for everyone to see & we can't move on like this.We are all seized with an economic situation which should force us to put our heads together for the benefit of our beloved Zimbabwe ,not ZPF or MDC-T. Please forget all about party politics & work for Zimbabwe.Cde Chinamasa has clearly showed us that no help is forthcoming from anyone. Please let us sit down & work out plans to save our country together despite political differences.

CHIKARA - 20 May 2014

In Zimbabwe we are so blessed to have analysts in business, industry and politics like Eric Bloch, Masunungure, Robertson, Shumba, who dish out very helpful and practical solutions that can easily get us out of these doldrums we currently find ourselves stuck in. We are cursed however when it comes to our leaders who do not seem to want to listen to all the expert advice they get everyday. The end result is we keep sinking deeper and deeper because of these old men who think only they have the answers and solutions to our predicaments.

Dr Know - 20 May 2014

If the truths is told without fear or favor, this whole economic slide down was due to some of our own brothers who meddled lies , called for sanctions so as to have a puppet government, but the people remained resilient- that is a very important statement which is left out by some puppet media houses.

reason - 20 May 2014

@Reason, it is sometimes better to not contribute when u've nothing intelligent to say lest the smart ones see through the fact that you are a certified numbskull. I for one think that the CZI president is being very sensible and rational by calling for a collective national effort to turn around our distressed economy.

Morena - 20 May 2014

mugabe z troubling us,please wat e pride is all about yet doing nothing

rodgers bande - 20 May 2014

....indeed, Tsvangirai is not educated enough but....i think the man has the wit and the guts to rule this Zimbabwe better than what we are seing.....soon after the disputed elections he called out to Mugabe for dialogue , but alas Gumbo and some few desperate sycophants thought he was day dreaming......now look, dialogue is the answer our current problems and indeed, the problems besetting this country need to be solved politically.....the winner take all mentality is a thing of the past....

Steel Wire - 20 May 2014

Only fools (read...@Reason) think that MT has enough clout to influence Western foreign policy. Western powers act to protect their own interests not at the behest of the likes of MT. This is a lie peddled by ZANU PF and the state media. If MT did indeed had such clout then Mugabe and ZANU PF would have been history as Western armies would have come and went a long time ago.

mukwerekwere - 20 May 2014

Ndakakuudzai kuti Morgen is MORE. They will have to talk to him and pliz Zimbabwe, prepare for new elections early next year

changu - 20 May 2014

Zanu PF has no solutions to the problems bedeviling our nation. Zimbabweans must have seen this before the elections and should have voted otherwise. The face of Mugabe and his bunch of ministers are not acceptable to the world big powers who matter. You may be acceptable to small boys like South Africa China etc but When you go to the wrong side of big powers like Britain and America you have really made a mistake. Mugabe and his bunch of crooks made regretable mistakes to invade farms and property. how can invade civilian peoples property in your country and destroy property rights. Now they talk of compersation. Where are they going to get that money. It is not only white farmers who lost. People lost savings, policies and life time savings because of these peoples need to cling on power. People in Zimbabwe should wake up and see that with these people still holding the reins we will continue to suffer. Zimbabweans wake up

Zvigubhu Ngondongodo - 21 May 2014

No NIKUV,NO DIALOGUE. ZPF have no clue on solving Zim's obvious economic problems but they have NIKUV to win elections which is the most important thing for them. The pple's loss of jobs, economic collapse,bla,bla count for nothing. Yes,those for the pple call for dialogue,NOT ZPF as long as NIKUV is alive.

DAKARAI MAMBO - 21 May 2014

FOR SALE HP TONER CARTRIDGES 05A, 10A, 11A, 12A, 13A, 15A, 24A, 35A, 36A, 49A, 51A, 53A, 55A, 61A, 64A, 70A, 78A, 80A, 85A, 90A, AND MANYMORE 0772 678 311

ORIGINAL - 21 May 2014

Ndakaziba Majaya (main reporter) and Dakarai Mambo - Your narrations simple means ZANU-PF must have talks with MDC-T. Again you imply that investors ran away in droves after ZANU-PF won the elections and as a result a result the economy is nose-diving. Where is the connection among ZANU-PF, MDC and Investors? Zimbabweans are very educated and literate. If you leave people to read in between the lines, and hope they will get your direction, they will actual get the opposite direction. You are actual shooting your own foot! As for Dakari - to still hover in the illusion of NIKUV after almost 12 months of election is the greatest folly of all times. Do you have eyes, ears and nose? Wake up!

dungas - 21 May 2014

@ Dungaz, even your name gives the picture of someone who is not exactly right in the brain. How else do you explain the sudden collapse of the economy soon after elctions and the sudden upturn of it when the GNU was formed? You read in between the lines and there you will find the answer Dungaz or is it Dunyas?

Dr Know - 21 May 2014

This thing Mugabe and his bunch of goons took the whole country down the tubes from the disastrous 1997 warvets payout to the farm invasions and murder to the company and asset looting and takeovers and Zimbabweans STILL blame other factors for the demise of a once vibrant economy!!! unbelievably stupid! Maybe Zimbabweans deserve every bit of suffering they get with this sick blame and take attitude to their plight! Stop moaning, get of your damned backsides and get rid of the human waste running your lives and instill some pride in the nation and yourselves for gods sake! It is really such a simple and uncomplicated matter for those with the wherewithal to use their education!

sabi - 21 May 2014

Post a comment

Readers are kindly requested to refrain from using abusive, vulgar, racist, tribalistic, sexist, discriminatory and hurtful language when posting their comments on the Daily News website.
Those who transgress this civilised etiquette will be barred from contributing to our online discussions.
- Editor

Your email address will not be shared.
 
Enter the three characters from the image on the right. This helps prevent automated 'bots' from submitting spam to the site. This field is NOT case-sensitive. If the characters are a bit hard to see, try refreshing the code by clicking the image.