18.11.2013

CZI: Businesses confidence shrinks

Across Zimbabwe, dozens of factories lie idle with peeling paint, rusting machines and broken roofs in once bustling industrial districts, symbols of the huge economic challenge facing President Robert Mugabe and his Zanu-PF party.
On the surface, things look rosy after Mugabe’s landslide election victory in July: growth forecasts are looking more positive as agriculture recovers, inflation has been tamed and the stock market is starting to buzz again after some listless post-election trading.
But look behind the headlines and the landlocked southern African nation’s manufacturing heartlands, which accounted for a quarter of the economy a generation ago, are now wastelands - and some fear the decay is permanent.
From Harare in the north to the second city of Bulawayo in the south, companies are working at a third of capacity, down from 55% a year ago, according to the Confederation of Zimbabwe Industries (CZI).
“Businesses are collapsing, and the economy will need a real big push-start to get going again,” said an accountant winding down tube-making firm BMA Fasteners and Tube and Pipe in Harare. He declined to be named for professional reasons.
“At this rate, it’s frightening to think what the future holds,” the 42-year-old said, scratching his head. “I don’t think it is an exaggeration to say it might just be hell.” Although they are careful not to blame politics, industry bosses say business confidence has fallen since the 89-year-old Mugabe was declared the overwhelming victor in the 31 July election, which the opposition MDC rejected as rigged.
New finance minister Patrick Chinamasa expects the economy to grow 6.1% in 2014 from 3.4% this year but that will make no dent in unemployment estimated at over 80%.
Zimbabwe’s economy shrank by 45% during a decade-long crisis blamed on Zanu-PF, but bounced back in 2009 after Mugabe was forced to share power with arch rival Morgan Tsvangirai after violent and disputed elections the previous year.
The July election put paid to that coalition, and with it what some critics saw as the MDC’s moderating influence on Mugabe and Zanu-PF nationalism.
In its most blatant form, that nationalism was manifest in Mugabe’s “indigenisation” push, under which foreign-owned firms have been forced to sell majority stakes to local blacks. (The Namibian, Windhoek)

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