Zimbabwe Business Watch : Week 13
With the elections looming, the National Indigenisation and Economic Empowerment Act has been signed but technically the legislation has already lapsed and must now be presented before the new parliament after the National Poll. Conveniently, the concept is being used as a rally point and it has brought new levels of uncertainty into the business environment. Farcically the funding would come through the imposition of levies on companies which effectively will pay for the whole process.
As inflation soars, cash is rapidly drying up severely limiting businesses’ access to fuel and, to some degree, black market funds. There will be some relief from the fact that cash withdrawals have been raised from 500 million to 5 billion per day (R600).
At political rallies President Mugabe has again threatened businesses to drop the prices of basic products and services and the price of bread has been forced down to $6, 600,000 per loaf after the detention and arrest of baking industry leaders. The break even price is $15,000,000 per loaf (R1.67). There are now plans to slash all prices to February 12 levels which would once again close factories and empty the shelves.
The USD is trading as high as 68 million (68 billion) to one.
