Zimbabwe Business Watch : Week 30
Factories continue to shut down and warehouses are being depleted and the last stocks of manufactured goods have all but disappeared from the shelves. Whilst there has been some backtracking by government on Operation Dzikamai, the Minister for Industry and International Trade, Orbert Mpofu, continues to threaten the business community and issued this recent statement:
“Once we take over a company, we retain all the staff and bring in a manager. All we get rid of is the owner of the company,” he told a meeting in Bulawayo.
He added: “We do not want to kill you, but to make your business viable. Once you are in business and happy, you will also leave us to run the country. It is in that spirit that I say we are here to correct each other. We want to build some kind of an orderly business environment. I will hate to reach a stage where I will be forced to take over the companies from you, but if you do not co-operate that is what is going to happen and this is the position of the government.”
The stock exchange has recovered somewhat and the Reserve Bank has returned to the FOREX market, accelerating the depreciation of the Zimbabwe Dollar once more and the Rand had reached 36 000:1 yesterday. The OM implied rate stands at 18 500 which may well be a reflection of the state of share prices. Business is under siege by the state with both the current price control prices and “Indigenisation” threatening. Banks are now becoming jittery as collateral assets are threatened with expropriation. This resembles the farm invasions and the banking sector is nervous about experiencing major losses once again. Companies have generally made a provisional plan to see to see out the crisis believing that relaxation of the controls is inevitable as shortages mount.
Recent news indicates that negotiations between government and some industrial sectors is underway.
