A RECENT survey of Africa’s top companies has revealed that Zimbabwean companies are struggling to compete with their regional and continental counterparts, with only eight local firms making it into the continent’s top 500 list.
The survey was conducted by Africa Report magazine and involved extensive interviews of 8 181 companies in 54 African countries.
According to data published in February’s issue of the magazine, mobile telecommunications giant Econet Wireless is the top-ranked Zimbabwean company, coming in well down at 197th.
Econet, which came into existence against the background of strong government resistance in 1998, recorded a turnover of close to US$752,7 million, which translated to a net profit of about US$119,4 million for the reviewed 2013 period.
This pales in comparison to the US$67,83 billion turnover realised by top-ranked Sonatrach, an Algerian fuel concern. Econet is also dwarfed by South African telecoms giants, MTN and Vodacom, banks and other corporates sampled.
Sonatrach recorded a net profit of over US$5 billion — which is more than the annual Zimbabwean budget which has consistently failed to breach the US$4,5 billion mark in recent years.
Sonatrach’s net profit is also more than the revenue collected by the Zimbabwe Revenue Authority (Zimra) in 2014, which stood at US$3,6 billion.
The list also includes Innscor Africa at 223rd, with food and beverage concern Delta Corporation the third best Zimbabwean company at number 235.
Ok Zimbabwe, Zimplats, Meikles Africa and National Foods Holdings all made it, with agribusiness concern Aico Africa the lowest ranked at 445th.
Predictably, continental powerhouse South Africa contributed more companies than any other country with 159 making it from diverse sectors such as mining, telecoms, construction, agribusiness, retail and mining. Eight of these are in the top 10 ranking, with an overall 16 making it into the top 20.
Even strife-torn countries are faring better than Zimbabwe with the likes of Algeria contributing 20 companies with interests in sectors spanning agribusiness, construction, telecommunications and insurance.
Egypt contributed 42 companies involved in manufacturing, air travel, petroleum and car manufacturing. The fact that the Zimbabwean companies that made the list are essentially service-driven demonstrates the extent of the de-industrialisation that has affected the country over the course of 35 years of Independence from British rule.
Major companies that used to drive the economy, once the second most industrialised in sub-Saharan Africa after South Africa, have been closing down at an alarming rate with government seemingly reluctant to implement good policies and measures necessary to revive them.
Steel-making giant Ziscosteel, which provides the iron and steel that underpinned manufacturing and the National Railways of Zimbabwe (NRZ), which played a critical role in transporting manufactured, mining and agricultural products are largely redundant. Many other companies are closing on a monthly basis with an average of 400 workers losing their jobs per month.
Over the past decade, Zimbabwe has been plagued by low investor confidence following controversial government policies including the fast-track land reform programme starting in 2000 which has resulted in more than 6000 white commercial farmers being stripped of their land ostensibly to empower blacks who were disadvantaged under colonial rule.
The government also enacted a much-criticised indigenisation law which compels foreigners to cede 51% shareholding in companies to indigenous blacks. Capacity utilisation is currently very low at 36,3%. Finance minister Patrick Chinamasa has expressed concern about Zimbawean companies’ lack of competitiveness.