Nicoz Diamond optimistic

NICOZ Diamond managing director Grace Muradzikwa says her company remains optimistic of a bright future despite not yet seeing positive signs in the economy.

Muradzikwa told shareholders at the company’s 12^th annual general meeting that she remains hopeful of the economic policies being crafted by government to stir economy out of the murky waters.

“Though the outlook of 2014 is not yet clear, we remain optimistic that policies being put in place by government will go a long way in helping stir the economy forward,” she said.

The macro-economic environment obtaining in Zimbabwe remains a major challenge for businesses operating in the country mainly because of the chronic liquidity constraints coupled with subdued economic performance, which has seen capacity utilisation in industries ranging between 45 and 39 percent.

Majority of companies are seeking funds for recapitalisation but local banks have been unwilling to offer long-term funds and at reasonable rates.

Barclays Bank announced at its annual general meeting a few weeks ago that it is continuing with its safe-lending strategy owing to high levels of defaulting in the country.

The bank also said majority of deposits in the bank are short-term and transitory in nature and cannot be loaned for a long time.

However the unavailability of these funds has resulted in most companies scaling down operation while many others have closed shop.

A few banks that have been a bit generous with their loan book are said to be only giving short-term loans with a maximum of 36 months and at usurious rates.

The under-performance obtaining in the economy at the moment has derailed minister Patrick Chinamasa’s economic growth projection of 6 percent with the World Bank saying the economy will only grow by a mere 3 percent this year.

Economic expects have blamed the country’s high risky status, policy inconsistencies and the controversial indigenisation program being implemented by government as the major reasons that has resulted in foreign investors shunning the country.

Under the Indigenisation and Economic Empowerment Act all foreign owned companies operating in the country and whose value is more than US$1 are required to cede 51 percent shareholding to locals.

And there has been conflicting statements with regards to the 51 percent stake, with some in government saying they will be acquired at market value.

But President Robert Mugabe is on record during his election campaigns arguing that locals will not pay a cent for the shares by virtue of being the owners of the land and resources.

Major mining companies such as Zimplats, Mimosa Mining and Unki Mine among others having already complied with the law.