Zimbabwe Business Watch : Week 29
The week proved to be another one of frustration although pressure is building on the Transitional Government to confront the real issues impeding the much mooted economic revival. Mistrust at the top level, continues to interfere with day to day cooperation and this, in turn, is holding up the implementation of policy.
However, much is being done in ministries where the former opposition parties have control and legislation is being prepared to deal with a number of long outstanding matters of concern. The budget is expected next week and this has, to some extent, resulted in caution as exemplified by the stock exchange where activity is flat as investors trade cautiously.
Property and Consumer/retail are the best performing sectors as opposed to those that struggle to take advantage of a growing market due to lack of funding. To compound this, local product remains expensive or provides retailers less margin. This is due to high cost electricity, rent and raw materials (high interest rates).
Fuel shortages exasperate an already difficult situation but it is believed that a new energy policy will address this by liberalising the industry to allow market forces to determine conditions. Despite short term political uncertainty, Zimbabwe is now proving to be an attractive investment destination.
