HomeBusiness DigestElections bring renewed hope for Zim business

Elections bring renewed hope for Zim business

ONE man’s meat is another man’s poison, goes the hackneyed adage.

Taurai Mangudhla

This phrase expertly describes the perceptions of most business people about how the impending general elections will affect and are probably affecting not only current performance, but influencing future prospects of their enterprises.

It is interesting to note that while the majority of companies say their operations will be negatively affected by elections, Delta Corporation CEO Pearson Gowero recently said the environment around the polls actually brings good business fortunes for the beverage manufacturer.

“We have had eight elections over the past 10 years and in all these instances consumption has grown and so we remain optimistic,” Gowero said while presenting the trading results of his company.

As the majority of Zimbabwe’s industry leaders pin their hopes for renewed investor confidence in the country on the credibility of the upcoming elections, continued delays and bickering by the political players is proving to be unhealthy for the economy.

According to a report carried in our sister paper, NewsDay, early this week, Finance minister Tendai Biti will soon deliver a lukewarm mid-term Fiscal Policy Statement, with no new proposals for economic recovery, as the rest of government has effectively been reduced to a lame duck after President Robert Mugabe made unilateral election proclamations.

In May, Biti said the economy could have shrunk by as much as 3% between January and April mainly due to uncertainty of elections.
He said the country had recorded a 2% fall in imports in the month of April to US$704 million compared to US$718 million the previous month.

“This would ordinarily be a good thing but in this case it is not because it is a sign of declining activity because of the elephant in the living room , which is the issue of elections,” Biti said.
“Until there is clarity on funding and dates we will not see a return of business confidence.”

Despite previously disputing that declining inflation was partly due to the slowdown in economic activity in the domestic economy, the treasury chief, however, conceded his office was worried by the slowdown in inflation to 2,49% from 2,8% recorded in the prior month which was “beginning to show signs of absence of economic activity, low demand and low uptake.”

Earlier this week, newly appointed Confederation of Zimbabwe Industries (CZI) president, Charles Msipa told businessdigest the country’s largest industry body was keenly awaiting peaceful and credible polls, which he said were expected to unlock the full potential of the country’s businesses.

“As CZI, we are calling for peaceful and credible elections and advocating for a clear election roadmap to be agreed on and announced, which enables business in the short and medium range planning,” Msipa said in an interview.

“The current situation of contestation between the political parties regarding timelines for elections is generating a great deal of uncertainty and anxiety. We shall continue to engage with stakeholders in the public and private sector to seek measures and policies that create an enabling environment for business viability and competitiveness. Political stability is an essential precondition for an environment that fosters business and economic growth.”

Msipa’s statement follows similar calls by Zimbabwe National Chamber of Commerce (ZNCC) for government to immediately hold elections, saying continued focus on politics was holding back business and the economy at large.

“We need the elections soon so as to cross the bridge and shift focus from politics to business, since in other countries business comes before politics,” ZNCC vice-president Davis Norupiri said.

ZNCC president, who is also the Vice President of the Zimbabwe Business Council, Oswell Binha echoed the same sentiments, saying the private sector had no direct voice and as a result business was suffering owing to policy inconsistencies, which were not favourable.

Last week, economist John Robertson argued the continued delay of elections was negatively impacting most businesses, warning very few companies would actually benefit during the election period.

He said business had slowed down together with the economy mainly because people are waiting for elections. Mugabe has threatened early polls since 2010, much to the detriment of the business environment.
“All investors are on hold and we are not able to increase trade. The scarcity of money is also a result of delays in holding elections,” Robertson said.

“The sooner it (holding of elections) is over the better, but we still hope the new government will have new policies that work for the country to promote investment.”

Individual businesses like Cimas Medical Aid Society (Cimas) also contend that elections should be held and be dealt with conclusively to create a much better business environment.

“I remain hopeful that after elections, the economy will see more positives than negatives,” Cimas chairman Steve Kuipa said in the company’s 2012 annual report.

Analysts have also pointed out that elections delays were hurting the economy’s recovery prospects in the form of delayed or postponed investment programmes by Zimbabwean companies.

A clear case in point is that of African Sun Ltd, which said it is putting off a major restructuring exercise at the hotel group, which would see the company offloading non-performing hotels, until the country holds its general elections this year.

Recent Posts

Stories you will enjoy

Recommended reading