EDITORIAL COMMENT: Signs of economic revival abound
An Indian investor is finalising paperwork for an investment in reviving Zim Alloys. Zimasco, another chrome processor, will by the end of this month, come out of judicial management. Merlin, a textile firm based in Bulawayo re-opened last week after a creditor put in $2, 1 million for working capital.
The company has also recruited 60 of its former workers.
Ziscosteel, which ceased operations in 2008 due to financial challenges, should soon resume operations after President Emmerson Mnangagwa last week met Chinese investors that are willing to revive operations at the steel manufacturer.
“With regards to Ziscosteel, we have a Chinese company that has come forward and the agreements will be signed soon,” he said.
“Last week, we had an interaction with the companies that have come in to resuscitate Ziscosteel. We believe it’s on course.”
Bank deposits are markedly increasing, a situation that is expected to help shorten bank queues and ease the availability of cash. It is also a signal that confidence in the local financial services sector is returning.
Shabanie and Mashaba Mine in Zvishavane will soon employ 350 workers as the asbestos miner readies to return to production. Dewatering of the mine is ongoing and is expected to be complete by the end of this year.
Mines and Mining Development Minister Winston Chitando said this in Parliament last week:
“At the same time, Mr Speaker Sir, we have recognised that to partly address issues relating to funding of the mine, we have identified reprocessing of one of the dumps as a low-hanging fruit.
“As we talk now, we do have about 50 people at the dump, mobilising to start the reprocessing of the dump, which should commence by May this year, wherein we expect to have 150 people, peaking at 350, to reprocess that dump.”
In December, Afreximbank, which appeared to have delayed releasing the long-promised $600 million nostro stabilisation facility, announced that the money should start flowing into the economy now.
Time Bank, which was closed in 2004, will soon reopen.
Monarch Steel, a division of Treger Group of Companies is doing exceedingly well. Agro-processing giant, United Refineries Limited is now diversifying its product portfolio to offer the full traditional soap brands-Geisha and has recently ventured into salad cream making. Blue Ribbon Foods reopened its operations at the beginning of the year and has created employment opportunities in the city. Pharmaceutical giant, Datlabs Limited has also increased its capacity utilisation to over 78 percent while Merprin Founders has also grown its output and is expanding export market base.
A South African business tycoon Mr Robert Matana Gumede landed in the country on Sunday and announced a plan to invest a staggering $1, 2 billion in the economy.
“For me Zimbabwe offers a great opportunity and Zimbabwe used to be the bread basket of Africa. I believe good times are back and I didn’t want to wait, especially when I am in South Africa as a neighbour,” said Mr Gumede.
He said if Zimbabwe and South Africa combined their strengths, they could do so much together and that Africans should help each other.
“I want to partner with local Zimbabweans in various sectors of the economy where we will work together. What will stop Zimbabweans from investing in South Africa? Nothing!” he said.
In the next two weeks or so, President Mnangagwa will attend the world’s most high profile business networking event, the World Economic Forum, in Davos, Switzerland, a platform at which Zimbabwe has, in recent years been represented by more junior officials, not the highest office in the land.
The Diaspora Infrastructure Development Group has indicated it will pump $400 million towards reviving the National Railways of Zimbabwe.
Indeed the sentiment out there is positive. Businesses are beginning to see a future for themselves and the economy at large. They are therefore deciding to get back to work, reviving their businesses and in some cases expanding them amid well-founded hopes that the economy will soon start picking up and begin to work again.
While we commend the activity that is going on in various sectors — mining, mineral processing, manufacturing, financial services and so on – we are mindful of the fact that economic recovery will not happen immediately. The railways will need a few more months to start working to world standard, energy projects always take time to complete and negative cultures, such as wanton price increases in the retail sector, may not go simply because we want them to. Also, foreign currency inflows may not be as huge and fast as we all want them to be. Exports have to continue improving in volume and value.
But overall, the progress made in recent weeks is encouraging.