The BusinessLink magazine team asked some of our leading entrepreneurs about issues that are of utmost concern to doing business in Zimbabwe today. Below are two of the comments we received.
Divine Ndhlukula, Managing Director of Securico
1. Corruption – supply chain systems in most companies are so opaque and corruption rules the roost. It is no longer the best man winning the job, but the one who pushes envelopes below the desks.
2. Debtors are a major issue. Most clients now hide behind the liquidity
crisis when in fact they just are using suppliers for free funding.
3. Big companies now literally dictate the price they want to be charged and businesses are being rendered unviable as one is forced to charge sub-economic prices just to keep the “important customer”.
Dr. Mike Joka, Managing Director of Corporate 24 Group
The challenges in our economy range from lack of funding, out of sync labour laws and lack of infrastructure development.
The funding which is available is not ideal for a country on a recovery path as it does not stimulate growth. The interest rates are very high; a situation which is not ideal for an ailing economy and as a result every bank’s balance sheet is full of non performing loans.
There is need for budgetary support to shore up the economy which is dominated by the informal sector. We all agree that the economy is being driven by the informal sector, these guys are creating more employment than industries but they lack funding. They do not have the loan requirements like collateral and as such banks don’t want to deal with them.
Is it still relevant for the government to prioritize distressed companies through DIMAF at the expense of the informal sector and SMEs? How much do SMEs require and how much do big companies like Cairns require?
It is more difficult to get money for Corporate 24, a budding Super Brand, than to get funding for the defunct CAPS HOLDINGS empire.
Isn’t it time to let bygones be bygones? Interestingly enough most of these companies are struggling with obsolete equipment and outdated business models. It’s time to support new players.
The labour laws need to be aligned with the performance of the economy and the companies. We have a very expensive labour force across the sectors. When it comes to the manufacturing sector, this has a huge bearing on the costing and pricing of products, resulting in our goods being more expensive for domestic consumption and worse still in the export market. In my sector medical specialist fees are the most expensive in the region.
The end result is a chain reaction that makes the cost of living unsustainable. Look at what is happening in the public sector, the expensive labour force at executive level, it is killing us. Are we collecting taxes so that we meet the public service bill? It defies any logic.
Last but not least, dilapidated infrastructure and lack of infrastructure development is stifling economic growth.
This article appeared in the April issue of BusinessLink magazine. Get a copy at http://smebusinesslink.com/magazine. The May issue will be out on 2 May, subscribe now by clicking below