Zim unity govt gives new lease of life to businesses

Monday, March 2, 2009

Harare - Business operations in Zimbabwe are once again showing signs of a recovery after a decade of political deadlock in that country as a result of the establishment of a government of national unity, writes Mugove Chigada.

The sector had been reeling from sanctions imposed by western countries for the past years in protest against the country's land reform policies. Zimbabwe's rate of inflation it currently at 213 million percent - the worst in the world.

However, the successful establishment of a an inclusive government, where President Robert Mugabe retains his title while Morgan Tsvangirai is sworn in as Prime Minister, is heralding a new beginning for the once robust economy in this southern African country, which was known as the bread basket of the region.

Managing Director, Wang Peiyu of Huawei Technologies Zimbabwe, a supplier of information technology (IT) components, said there is some light at the end of the tunnel.

"We are still watching the market. When we get projects we will start building our human resource."

The Chinese telecommunications company will also continue seeking market share in the Zimbabwean economy when opportunities arise.

The hotel industry is expecting to see significant changes, barring the global economic down-turn which has led to less people wanting to travel. "Business has slowed down. We hope for better times though," said African Sun Chief Executive Shingi Munyeza.

Retailers are experiencing brisk business following an increase in consumer disposable income.

In February, public sector employees received allowances in foreign currency to cushion them against the spiralling cost of living.

The Zimbabwe Stock Exchange has resumed trading on a low note using the US dollar following a three-month closure in the face of a scandal involving local currency.

The Southern African Development Community (SADC) meanwhile is considering investing $2 billion for reconstruction in Zimbabwe.

A World Investment Report shows that foreign direct investment into Zimbabwe slightly rose from $40 million in 2006 to $69 million USD in 2007.

Although investment is critical, economic recovery hinges on political stability in a country.

Economic experts have said the business sector is poised for dramatic recovery if it is given the impetus upon which to galvanize itself. Government should seek input from business for recovery.

Zimbabwe has agreed to relax 80 percent of imports from the European Union (EU) by 2022.

Trade between the country and EU declined to below 20 percent from 1990.

Zimbabwe National Chamber of Commerce official Laputya Hwamiridza says the business sector expects the government to involve it in negotiations on trade. "The business sector should give its input."

Prime Minister Morgan Tsvangirai said the government will take on board the business sector during negotiations.

Experts believe that there is room for the Zimbabwean economy to grow although the world is going through a serious recession. The crisis would, however, see reduced aid flows to Zimbabwe at a time when it is struggling to stand up on its feet.

"The focus is on ensuring economic recovery. The economy requires investment to start production and trade," said Economic Planning Minister Elton Mangoma. Experts believe that there is room for the Zimbabwean economy to grow although the world is going through a serious recession. The crisis would, however, see reduced aid flows to Zimbabwe at a time when it is struggling to stand up on its feet.

"The focus is on ensuring economic recovery. The economy requires investment to start production and trade," said Economic Planning Minister Elton Mangoma.

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