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CHAIRMAN’S REPORT FOR THE YEAR ENDED 31 DECEMBER 2008
Introduction
The year 2008 had its fair share of challenges, which saw the operating
environment for exporters getting harsher. Exporter viability remained
constrained by the unrealistic exchange rate and retention levels.
Capacity utilisation by manufacturers continued to decline as they suffered
from shortages of critical raw materials, water cuts, power outages and
hyperinflation.
The global financial crisis compounded the scenario as the world plunged
into a recession resulting in the economies of most of Zimbabwe’s trading
partners underperforming.
However 2009 started on a positive note. Liberal monetary and fiscal
policies introduced during the first months of the year, coupled with the
adoption of multiple currencies have resulted in price stability and an
upward trend in capacity utilisation by industry. This has also resulted in
increased business confidence on the backdrop of a better performing
economy.
ZimTrade Financial Performance
The financial performance of ZimTrade cannot be measured objectively and
with reliability in 2008 due to the absence of inflation indices, the
continuous slashing of zeros and the use of multiple exchange rates among
other things.
Income
The total income was Z$51.7 trillion. The major revenue contributor remains
the trade development surcharge.
During the last quarter the organisation started accessing the trade
development surcharge in foreign currency.
Expenditure
The expenditure continued to balloon to unprecedented levels due to
inflationary pressures and a weakened domestic currency, which was
benchmarked upon different exchange rates. The total expenditure for the
year amounted to Z$693.4 billion.
The surplus of income over expenditure for 2008 amounted Z$51.038 trillion.
Export Performance
Total Zimbabwe exports for 2008 were US$1, 376 billion compared to US$1,606
billion recorded in 2007 thereby registering a percentage decline of 14,3%.
Performance was a reflection of the low capacity utilisation in the
manufacturing sector, which was caused by shortages of raw materials, power
and water cuts and price distortions.
Operations
The challenges experienced by the producers and exporters had a negative
effect on the execution of ZimTrade’s programmes and general operations at
large. The organisation undertook fewer activities than planned as companies
struggled to finance their participation and others failed to bear the
challenges, as they did not have product and capacity utilisation continued
on a downward trend.
Resultantly, during the last four months of the year nearly all planned
events could not be executed.
During the year, exporters were facilitated to participate in trade
exhibitions in Malawi and Zambia and the ITC organised a buyer/seller
meeting that was held in Johannesburg, South Africa.
The scarcity of foreign currency experienced throughout 2008 negatively
impacted on the library collection development as the organization could not
source new material from outside Zimbabwe.
Visibility for ZimTrade and information dissemination was achieved through
publications such as the Export Directory, Weekly Bulletin, Monthly
Newsletter, workshops, seminars and company visits. In addition useful
guides that are aimed at the new exporter were also distributed.
ZimTrade’s advocacy campaign for an improved operating business environment
for exporters eventually yielded fruit. We are pleased that new monetary and
fiscal policies have brought about the much needed trade liberalisation and
streamlining of export and exchange control procedures.
Towards the end of 2008 ZimTrade entered into an agreement with the European
Union to implement the Agricultural Trade and Marketing Project that will
run until December 2010. The project, through export training and outreach
programmes seeks to equip rural horticulture farmers with the requisite and
necessary knowledge and skills on how to effectively exploit local and
export market opportunities.
Outlook
It can be argued beyond any reasonable doubt that the general atmosphere is
that of optimism and the outlook of the economy is positive. Liberalisation,
dollarisation and the resulting stabilisation have presented real
opportunities for increased production and export growth. However, the
manufacturing sector export performance remains inhibited by inadequate
working capital to revive vital operations.
Full turnaround hinges on the commitment to implement policies and
programmes as outlined in the Short Term Emergency Recovery Programme (STERP).
Appreciation
I would like to extend sincere appreciation to the Government, fellow Board
members, ZimTrade members, management and staff for their continued
commitment and valued contributions to the organisation. May the team spirit
and hardwork continue to flourish for the betterment of the organisation.
Conclusion
For the past few years ZimTrade has operated under very difficult conditions
with barely enough income to cover running expenses. We have reached a
situation where delivery of services is now seriously compromised as the
organisation continues to use an old motor vehicle fleet, an obsolete ICT
infrastructure and out-dated information resources. Today ZimTrade is a pale
shadow of what is it was before the turn of this millennium. It has become
very clear that the trade development surcharge and membership fees are not
adequate to sustain ZimTrade’s operations. In this regard, I would like to
challenge all ZimTrade stakeholders (i.e. board members, management, members
and government) to provide the organisation visionary, dynamic and
innovative leadership that will see ZimTrade harness resources from a
diverse base and help it regain its position as a strong and sustainable
trade promotion organisation.
D J Chigaru
CHAIRMAN
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