CIVIL SERVANTS GET SHOPPING VOUCHERS

Some Government Ministries have quietly issued shopping
vouchers with values of between $600 and $1 300 to their workers and analysts
have warned that this move which leaves out large groups like teachers will
cause discontent.

The Mirror confirme…

Some Government Ministries have quietly issued shopping vouchers with values of between $600 and $1 300 to their workers and analysts have warned that this move which leaves out large groups like teachers will cause discontent. The Mirror confirmed that two Ministries; Mines and the Ministry of Lands, Agriculture, Water, Climate, and Rural Resettlement issued out vouchers this month. It has

Mnangagwa’s time is up…Very soon we are going to liberate our country: Zimbabweans told

OPPOSITION MDC president Nelson Chamisa yesterday conceded that he was under “immense pressure” from restless party supporters who want to confront President Emmerson Mnangagwa over his handling of the country’s economy. Zimbabwe is f…

OPPOSITION MDC president Nelson Chamisa yesterday conceded that he was under “immense pressure” from restless party supporters who want to confront President Emmerson Mnangagwa over his handling of the country’s economy. Zimbabwe is facing its worst economic crisis in a decade, with prices of basic goods soaring and shortages of medicines, fuel and electricity, while […]

UPDATE 2-Zimbabwe central bank leaves rates unchanged, bullish on inflation

Source: UPDATE 2-Zimbabwe central bank leaves rates unchanged, bullish on inflation – Reuters HARARE (Reuters) – Zimbabwe’s central bank left its benchmark interest rate at 35% on Monday, citing moderating inflation, as it looks to print more local currency and limit the use of foreign currencies. Zimbabwe is struggling through its worst economic crisis in […]

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Source: UPDATE 2-Zimbabwe central bank leaves rates unchanged, bullish on inflation – Reuters

Mangudya

HARARE (Reuters) – Zimbabwe’s central bank left its benchmark interest rate at 35% on Monday, citing moderating inflation, as it looks to print more local currency and limit the use of foreign currencies.

Zimbabwe is struggling through its worst economic crisis in a decade, with prices of basic goods soaring and shortages of medicine, fuel and electricity worsening. Hopes of a quick recovery under President Emmerson Mnangagwa are fading.

The worsening poverty is upsetting the fragile calm that’s prevailed since the 2017 coup that toppled long-time ruler Robert Mugabe.

After suspending publication of annual inflation data, which economic analysts put at 525% in December, authorities will resume printing the figures next month.

Governor John Mangudya was bullish on inflation, projecting that annual price growth would dip below 50% by the end of the year. Monthly inflation fell in January to 2.23%

“Our task is we stabilize inflation and stabilize the exchange rate. We expect month-on-month inflation will continue to come down until the end of the year,” Mangudya said.

“Most of the inflation is caused by non-monetary factors. That is expectations – that ‘I lost money in 2008’,” Mangudya said. “This is a once-beaten, twice-shy scenario. These are things that shape inflation in Zimbabwe.”

Zimbabweans have little confidence in monetary policy after pensions and savings were wiped out at the height of hyperinflation, which reached 500 billion% in 2008 and forced the country to dump its local currency.

Last year in June, Zimbabwe ended a decade of dollarisation, which fuelled inflation. Mangudya said it would take up to five years to completely wean Zimbabwe from using the U.S. dollar in local transactions.

Seeking to reassure investors, the governor said foreign currency accounts held by companies, donors and individuals were safe, while businesses like mines would continue to receive a portion of their export earnings in dollars.

To ease shortages of cash, the bank will feed higher- denomination Zimbabwe dollar notes into the economy while increasing transparency on foreign currency trading to stabilise the exchange rate.

The central bank governor said he still saw economic growth at 3% in 2020, citing improved rainfall since mid January. (Reporting by MacDonald Dzirutwe, writing by Mfuneko Toyana; editing by William Maclean, Larry King)

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65 Zupco Buses Arrive

Government has intensified efforts to recapitalise the Zimbabwe United Passenger Company (ZUPCO) as it moves […]

Government has intensified efforts to recapitalise the Zimbabwe United Passenger Company (ZUPCO) as it moves [...]

‘I’m feeling the heat’ – Chamisa

OPPOSITION MDC president Nelson Chamisa yesterday conceded that he was under “immense pressure” from restless […]

OPPOSITION MDC president Nelson Chamisa yesterday conceded that he was under “immense pressure” from restless [...]

BODIES DECOMPOSE AT HOSP

Corpses are decomposing at Marondera Provincial Hospital
due to non-functional mortuary refrigerators, it has emerged.

This was revealed by Marondera Central legislator Caston
Matewu (MDC Alliance) during a Zimbabwe Union of Journalists (ZUJ)-orga…

Corpses are decomposing at Marondera Provincial Hospital due to non-functional mortuary refrigerators, it has emerged. This was revealed by Marondera Central legislator Caston Matewu (MDC Alliance) during a Zimbabwe Union of Journalists (ZUJ)-organised community reporting workshop at the weekend, where he said his office had since invited Health minister Obadiah Moyo to visit the institution

Why SMEs in Zimbabwe fail

Source: Why SMEs in Zimbabwe fail | The Herald February 18, 2020 SMEs Benard Gwarada Correspondent When a business fails, this does not adversely affect the owner only, but such failure also negatively affects the Government which has an inherent interest in employment creation and poverty reduction. The Government is also responsible for creating a […]

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Source: Why SMEs in Zimbabwe fail | The Herald February 18, 2020

Why SMEs in Zimbabwe failSMEs

Benard Gwarada Correspondent
When a business fails, this does not adversely affect the owner only, but such failure also negatively affects the Government which has an inherent interest in employment creation and poverty reduction.

The Government is also responsible for creating a conducive macro environment for SMEs to sprout and thrive.

Some scholars have pointed out that most SMEs which fail tend to blame Government policies as opposed to factors to do with the shortcomings of the owner.

Researchers have identified a number of common factors that act as obstacles to the success of SMEs such as lack of planning, insufficient capital, competition and mismanagement of tax affairs.

However, Zimbabwe is a country with its own dynamics and therefore this article will dwell on the following seven factors that reflect the current peculiarities of the socio-economic and political environment.

Lack of entrepreneurial

mindset

Some Zimbabwean SMEs have folded because of a conscious or subconscious preference to conduct business in a comfort zone. However, without some degree of risk taking, no business can develop and let alone flourish.

On the other hand, an entrepreneurial mindset is able to propel the entrepreneur forward even in a situation of very limited resources and adversity.

The “hand-outs” mentality leads to the constant blaming of institutions such as banks and the Government for not providing the required financial assistance.

Self-made billionaires Bill Gates and Oprah Winfrey are famous failures who refused to give up. They have proved that risk taking can yield great rewards.

Managerial incompetence

As an SME grows, it is not possible for the owner to be a jack of all trades. Expertise in areas such as people management, planning, financial management and marketing is required for the effective running of SMEs.

In a number of cases, owners of SMEs may fail to adjust to the demands that are triggered by the growth of their organisations, resulting in the owner of the SME continuing to operate in roles where he or she lacks specialist skills or knowledge.

Without such knowledge and skills, the SME is likely to encounter obstacles in its operations that could have been easily avoided and this becomes a hurdle to the success of the SME.

It should however, be noted that, even where the SME is at its initial stages of development, it is incumbent upon the owner of the SME to take steps to improve his or her skills levels.

When this is not done, the SME is likely to be run in a haphazard manner, leading to failure sooner than later.

Lack of industry experience

and knowledge

The owner of a SME must take time to understand the industry in which he or she is operating.

The entrepreneur must be able to answer the following questions;

what is the core business of the industry,

Who are the players in the industry?

What are the characteristics of the players in the industry?

What are the opportunities available in the industry? and

What are the challenges and how may these challenges be overcome?

When such fundamental questions are not asked and honest answers given, then the SME is doomed to fail.

There is a tendency in Zimbabwe where a “herd mentality” is apparently in operation. This is whereby almost without thinking, someone rushes to open a business in a given area because this appears to be fashionable at that time.

A case in point is the breeding of quail birds (zvihuta) which hit a crescendo in 2015, but fizzled out when it turned out not to be a profitable venture.

Similarly, some people without a mining background have poured their hard-earned savings into artisanal mining ventures and have come out with nothing.

Poor control systems

SMEs that do not have control systems in place are likely to fold because they do not have control over the organisation’s operations.

The areas of concern include the control of company assets, the control of financial resources, the control of information resources and the control of human capital.

For instance, in the transport industry, some companies failed to scale greater heights because they had no full control over the whereabouts of their vehicles. However, digitised tracking system has assisted in mitigating this challenge.

With good control systems in place, goals are clearly set and performance standards are easily visible and enforceable.

Some people have tried to conduct farming while they are based away from the farm, and usually in towns. This leads to a situation where the owner of the farming enterprise has little or no control over what happens at the farm.

Some SMEs have failed because they extended too much credit to customers who then failed to pay back.

Self-discipline is another key pillar in entrepreneurial success.

Some SME owners are in the habit of “taking from the till” either for themselves or for some relatives. Some even abuse facilities from banks, resulting in massive loan defaults. Such practices lead to the collapse of the business sooner or later.

“Tenderpreneurship”

There are SMEs that rely on tenders for them to continue to exist. In essence, these are briefcase SMEs.

The problem with these SMEs is that their death is inbuilt in their practices in the sense that tenders at some point may run dry.

Most of these companies skip the important stages in the business lifecycle as they jump straight into the maturity stage and this is not sustainable. Such SMEs do not have any production that they create as they gallivant from one tender to another in virtually all spheres of economic activity. When the tenders are no longer available, such SMEs are likely to close shop.

Failure to exploit digital technology

Some SMEs have failed to make use of digital technology and its attendant benefits.

There are some transactions that can be done through digitised platforms and do not require the physical presence of someone at a particular place.

However, some SME owners have been slow in embracing such technology.

The owner is used to the traditional way of conducting business that requires his or her physical presence at a particular geographical place.

SMEs are failing to take advantage of the time which is a precious commodity that can be made available to them when they utilise digital platforms to conduct business.

Such time can be used by the owners of SMEs (for example at Mupedzanhamo or Glen View Area 8 complex) to attend to some other pressing issues instead of spending time in queues at banks or any other place.

In this way, the SMEs can greatly minimise chances of failure and improve chances of success.

Economic policies

While it is important and even necessary for the Government to announce its polices from time to time, this has in some cases negatively affected operations of SMEs leading to some closing shop because of their inability to adjust to the new prevailing economic regime (market distortions) and the cost implications thereof.

For example, on February 20, 2019, the Government liberalised the trade of foreign currency and declared the RTGS dollar as the local currency.

Another case in point is the Supreme Court of Zimbabwe’s landmark judgment involving Zambezi Gas Zimbabwe (Pvt) Ltd and NR Barber (Pvt) Ltd on January 20, 2020, which declared that all foreign currency debts incurred before February 22, 2019, are to be paid in RTGS at the rate of 1:1.

In conclusion, it can be seen that there are a number of factors that can lead to the failure of SMEs.

While government clearly has a role to play in the success or failure of SMEs, there are also other factors that are largely within the control of SMEs in terms of determining the success or failure of these types of organisations.

Bernard Gwarada is a research candidate in International Business at University of Pretoria’s GIBS Business School. He writes in his own capacity.

Feedback: blgwarada@yahoo.com

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CHINESE COUPLE VANISHES IN HARARE

POLICE in Harare are investigating the disappearance of a
Chinese couple on Valentine’s Day after visiting a friend in Eastlea.

Police spokesperson Assistant Commissioner Paul Nyathi
yesterday said the two Chinese nationals, Lei Ding (35) and his …

POLICE in Harare are investigating the disappearance of a Chinese couple on Valentine’s Day after visiting a friend in Eastlea. Police spokesperson Assistant Commissioner Paul Nyathi yesterday said the two Chinese nationals, Lei Ding (35) and his wife Chi Lifen (30), went missing after visiting a friend, but their vehicle was later found dumped along Arcturus Road, with keys in the ignition.

TRAGEDY: 2 killed in horror accident

Two people died — one on the spot and the others upon arrival at Chinhoyi Provincial Hospital — when a haulage truck hit a pothole, veered off the road and ploughed into pedestrians at the 255km peg along the Harare-Chirundu Highway near Vu…

Two people died — one on the spot and the others upon arrival at Chinhoyi Provincial Hospital — when a haulage truck hit a pothole, veered off the road and ploughed into pedestrians at the 255km peg along the Harare-Chirundu Highway near Vuti Secondary School. Mashonaland West provincial police spokesperson Inspector Ian Kohwera confirmed the […]

CHAMISA : I’M UNDER PRESSURE

OPPOSITION MDC president Nelson Chamisa yesterday conceded
that he was under “immense pressure” from restless party supporters who want to
confront President Emmerson Mnangagwa over his handling of the country’s
economy.

Zimbabwe is facing its wor…

OPPOSITION MDC president Nelson Chamisa yesterday conceded that he was under “immense pressure” from restless party supporters who want to confront President Emmerson Mnangagwa over his handling of the country’s economy. Zimbabwe is facing its worst economic crisis in a decade, with prices of basic goods soaring and shortages of medicines, fuel and electricity, while rising inflation has