‘Zim approaching economic turnaround’

20 Apr, 2014 - 00:04 0 Views
‘Zim approaching economic turnaround’ Workers of Expoguys construction company of South Africa work on a South African exhibitor’s stand at the Zimbabwe International Trade Fair grounds in Bulawayo on Thursday

The Sunday News

Workers of Expoguys construction company of South Africa work on a South African exhibitor’s stand at the Zimbabwe International Trade Fair grounds in Bulawayo on Thursday

Workers of Expoguys construction company of South Africa work on a South African exhibitor’s stand at the Zimbabwe International Trade Fair grounds in Bulawayo on Thursday

Business Reporter
ZIMBABWE is approaching its economic turnaround as evidenced by renewed co-operation from the international community and positive gains in some sectors of its economy, a leading pan-African services group has said.
Imara Edwards Zimbabwe executive director, Mr Tino Kambasha said timing factors suggest that the country was now at a stage where private investors must take a closer look and invest in the country.

In a statement announcing the Imara investment conference that will be held from 27-30 May in Harare, Mr Kambasha said the announcement by the International Monetary Fund to reopen its Zimbabwe office and the announcement by the European Union to lift most of its remaining anti-Zimbabwe sanctions were a positive sign for the country’s future.

“Of course, it always helps when macro factors are supported by company performance, and some Zimbabwean blue chips have reported some impressive gains of late,” he said.

Mr Kambasha added positive sentiments on the local industry including the announcement that Ariston, the agriculture and horticulture-focused investment company that had a major cash injection by Afrifresh Group, its South African parent, had enabled significant investment in new crops and equipment.

“Significant volume increases are coming through. For example, tea production this year could be 250 percent above that of 2012 while macadamia nut volumes could see a rise of 77 percent.

In the tobacco industry, BAT Zimbabwe has reported better-than-expected year-end numbers and expects volumes to rise in 2014. Cash flow from operations was reportedly so strong in 2013 that BATZ was able to repay all outstanding debt.”

He said apart from EU investors, Zimbabwe was also on the radar of South Africa and Asian investors.

“We may have a soft market currently, but interest is firm.”
Mr Kambasha said investors abroad were slowly grasping how the Zimbabwean market performs and were slowly taking a closer look.

“Today, highly sophisticated investors from these countries have a much better understanding of the workings of our market.

They may occasionally move to the sidelines to wait for better value, but they have no intention of turning their back on Zimbabwe and sub-Saharan Africa. The feedback we get is that strategic interest is as strong as ever. This is a continent of huge growth potential. Investors don’t want to let those opportunities slip.”

Although some economic watchers predict that there might a dip in economic activity, they note that in the long run, direction will change.

Government has projected economic growth of 6,1 percent while the World Bank said it would grow by four percent this year.

An analyst with Lynton-Edwards Stockbrokers Kudzanai Sharara said Government needed to take hard decisions to ensure that the projected economic growth was sustained.

He said the admission by revenue collector, the Zimbabwe Revenue Authority that there was a need to plug revenue leakages was a sign of the need to quickly address the problem.

Zimra announced early this month that the country might be losing $3 billion annually to border leakages.

“It’s time Government consulted key stakeholders both local and foreign to formulate policies that are investor friendly. We believe the country owns an abundance of resources that can be leveraged to catch investors’ attention again,” said Mr Sharara.

Government has been trying to push for economic growth although liquidity challenges continue to be an impediment.

It has crafted an economic blue-print Zim Asset but has indicated that it needs $27 billion to fund programmes  prescribed in the document within a period of five years.

The country’s trade promotion board, ZimTrade said apart from attracting foreign investors there was a need to improve the quality of products for them to meet export standards.

In a survey released two weeks ago, ZimTrade said more than 60 percent of companies in the country were not exporting.

Exports boost liquidity of any country and contribute to economic growth.
It said 42 percent of the products were not certified hence not meeting export standards.

“There is a need to establish a working capital revolving fund for industry to fund export development and promotion activities such as market research,” said ZimTrade.

It added that support had to be offered to small businesses so that they were aware of the need for product quality testing and certification services.

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