Willdale laments 'rapid policy changes'

HARARE - Willdale has expressed concern over recent government policy changes, which have been largely blamed for worsening the country’s deteriorating economic situation.

Government implemented a number of abrupt reforms, shortly after the controversial July harmonised elections, headlined by the introduction of a two percent tax on electronic funds transfer as well as the separation of bank accounts for Nostro and RTGS funds.     

Although the economy was in an undesirable state before the nippy reforms, there has been a marked deterioration, with official inflation spiking to a post-dollarisation high of 31,01 percent from 4,29 percent in July amid the worsening of hard currency shortages.    

“The policy changes being undertaken by government under the Transitional Stabilisation Programme have presented challenges to business,” Willdale’s board chairperson Cleophas Makoni said in a comment accompanying the company’s financial results for the year ended September 30, 2018.

“The volatile economic conditions have presented challenges in maintaining cordial industrial relations and productivity,” he added.

Makoni, however, said the company posted a good set of results “despite the difficult operating environment which was characterised by shortages of foreign currency and rapid policy changes by the new government dispensation aimed at growing the economy”.

Revenues grew by 38 percent to $13,4 million compared to the prior year “driven by a three percent increase in volumes and a 34 percent increase in average prices”.

Overall, the company posted a $1,109 million profit from a profit of $304 906 in the prior comparable period.

Makoni said the company has optimal production capacity to meet demand “but its exploitation is dependent on the availability of fuel and foreign currency for plant spares”.

“Productivity improvement is dependent upon timely and efficient sourcing of raw materials, good plant availability and utilisation,” he said.

Shortages of fuel and foreign currency have however intensified in the heat of the current economic crisis.

In November, the minister unveiled a budget that introduced increases in import duty for fuel while duty for selected goods — including motor vehicles — will now be charged in foreign currency.

The measures, which were meant to eliminate “arbitrage” and curb foreign currency leakages, worsened the situation after the economy slid further into crisis following the implementation of the reforms in December.

Still, Willdale was upbeat about the focus of the budget.

“We are encouraged by the positive thrust of the 2019 National Budget which is targeting significant expenditure in infrastructure development, investment in the housing sector, and construction of accommodation facilities in the higher education sector.

“The company has strategies to exploit the opportunities and manage threats presented by the transformation of the economy,” Makoni said.

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