Zimbabwe’s toxic environment ruining economy: audit firm

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AN international audit firm has blamed Zimbabwe’s toxic political environment and policy inconsistencies for the country’s economic woes.
In its inaugural Chief Financing Officers’ (CFO)’s survey for Zimbabwe in 2014, Deloitte and Touche said the political situation remains the main issue that is scaring away investors and stalling economic recovery.
“The political landscape was named by the majority of Zimbabwe’s CFOs as the biggest risk to business performance, with 62 percent of Zim’s CFOs saying this is a significant risk.
“This could be linked to the ongoing nationalisation debate in Zimbabwe,” the report presented by South African Deloitte Partner, Roy Campbell, said.
“Following President Robert Mugabe’s victory in the national election in July last year, one of the election promises was stepped up debate and implementation of local ownership through the indigenisation programme,” the report said.
Deloitte and Touche is an international audit, tax, consulting and financial advisory services company.
The survey pointed out that 54 percent of the nation’s CFO’s say that investing in new capacity is among their top three priorities.
“The CFOs indicated that they favour expanding within their region rather than venturing into comparative unknown parts of the continent.
“It is the minority of Zimbabwean companies who are looking to expand into the rest of the continent at all.
“Just 12 percent of Zimbabwean respondents indicated a desire to expand in Southern Africa this year while a mere four percent said they were planning to establish presence in East Africa,” he added.
Despite the political situation, 80 percent of the CFOs said that 2015 and 2016 will see company performance improving than in the past years.
Managing Consultant and Leadership Content Developer at JSM Strategic Pathways, Joe Mutizwa, said it was refreshing to note that CFOs are quite confident regarding next year.
“CFOs are the people who chase the money so if 80 percent of them are expecting companies to perform better in the next two years that is a positive outcome,” he said.
“When looking at the economy you need to look at the long term that is 2015 and 2016 things like strengthening infrastructure, trade, balance sheet in the short term we will struggle but the long term is important,” said Mutizwa.Advertisement