Companies urged to now change business models

COMPANIES in Zimbabwe must adopt new business approaches as old models were now under threat from the liquidity constraints bedevilling the economy, a Zimbabwe Stock Exchange (ZSE) official said.

ZSE chairperson Eve Gadzikwa said Zimbabwean businesses needed to find new and innovative ways to reduce their cost structures and manage their debt levels to remain sustainable in the market so as to minimise effects of the ongoing liquidity crisis affecting the economy.

Speaking on the sidelines of the Institute of Directors Zimbabwe workshop, Gadzikwa said most companies were caught unaware by dollarisation and were struggling because they stuck to old business models thereby throwing their companies into a serious quandary.
She is also the vice-chairperson of the Institute of Directors Zimbabwe.

“Our business model are being challenged. We cant continue using old models .Its no longer business as usual. We really need to be frugal in the way we manage businesses; by finding ways of reducing costs for us to be more sustainable,” said Gadzikwa.

She said managing debt was problematic, adding that while some of the listed companies’ books were looking glossy, they were actually being afflicted by a plethora of problems.

“Debtors are a very big problem. You might invoice for services or sell your products but until you receive that money it is just on your books. This reduces the ability of any business to expand to such an extent that expansion programs are put on hold,” she said.

Gadzikwa said most of the listed companies who had survived the liquidity crisis had done so by partnering foreign companies, pointing at PicknPay’s investment in TM supermarkets.

Meanwhile, Gadzikwa also said the bourse was reviewing its listing rules so that companies would comply with the new integrated listing requirements.

“Our companies Act of 1963 is outdated and there is need to revise it. We would want to see companies complying to world minimum standards,” she added.

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