Zimbabwe Business Watch : Week 34
August 17th, 2009
A mood of optimism prevails despite the frustrating and sometimes negative news from the political arena. Economics and politics are more intertwined here in Zimbabwe than just about anywhere else in the world at present, as so much depends on stability arising from progress achieved in the GPA.
Many factories operate short weeks or alternate weeks in order to survive.
Forex liquidity remains the single biggest factor preventing sustained economic growth.
The retail sector continues its upward trend and mining is returning to previous production levels, but manufacturing struggles to source the finance necessary to re-stock and re-capitalise.
The multiplier effect of USD and Rand in the economy is providing some relief but, until the credibility of the Transitional Government is achieved, no major wholesale funding, through grants and loans will be forthcoming. Change for sales transactions on the street is a major problem, and the four major currencies, USD, Pounds, Rand and Pula, can all be in use at one time just to complete the deal. Cross rates are now used by members of the public and these ROE’s are adjusted almost daily in order to arrive at an equitable deal. Notes are becoming more and more soiled as cash remains the only means to do business outside inter bank exchanges.
The ZSE is performing well and Zimbabwe’s cost of living index drops further to fall in line with countries of the region.
