Zimbabwe business links encouraged

The South African Chamber of Business (SACOB) has encouraged its members to maintain commercial links with Zimbabwe despite the country’s economic crisis.

Kevin Wakeford, who led a SACOB delegation to Zimbabwe this week, was nevertheless blunt in his appraisal of the economic climate. He told IRIN:

“The Zimbabwean economy is busy imploding. Trading conditions, whether they be import or export, are extremely difficult due to the absence of vital business instruments such as credit guarantees, insurance cover and foreign currency shortages.”

He said a number of businesses have either closed down - some permanently and others temporarily - or are operating a shorter week. “However, the major problem is the disruption to the agricultural sector because of the farm invasions.” He said disrupting the farming industry will have serious consequences for the country’s food security situation and its ability to earn foreign exchange from export crops like tobacco.

Wakeford said Zimbabwean businesses are hopeful that the situation might improve after the elections which were initially scheduled for this month. “South African businesses, however, are cautious in their dealings with Zimbabwe. Many capital investment expenditure programmes have been suspended because of the uncertain business environment.”

He said the eight-member delegation also conveyed their sentiments regarding the rule of law and property rights while in Zimbabwe. “Our initial views were confirmed by the majority of interactions, that there is a disregard for the rule of law and property rights,” added Wakeford.

Another member of the delegation, Sabelo Macingwane, said as Zimbabwe is South Africa’s main trading partner in the southern African region, Zimbabwe’s situation is having a direct impact on South African economic conditions. “The recent fall in the South African currency is certainly linked to the Zimbabwean situation,” Macingwane said, referring to the rand’s fall to 6.83 to the US dollar this week, its lowest in about 20 months.

“Zimbabwe has been experiencing steady economic decline owing to poor macro economic policy with specific reference to monetary and fiscal management,” Macingwane said. He added that as a result of the country’s political and economic crisis, tourism has also been heavily affected.