THE Confederation of Zimbabwe Industries (CZI) has said the indicator on the current situation remained negative for the fourth quarter of last year despite the business confidence index (BCI) that measures perception improving during that period.
BY TATIRA ZWINOIRA
The BCI for the fourth quarter of 2017 that was released by CZI on Wednesday was 5,8 for quarter-on-quarter and 22,9 for year-on-year, indicating improved confidence and optimism of business leaders regarding the economy.
“This is the first positive result we have found since the inception of the Index. For your recollection, the Business Confidence for the 3rd quarter of 2017 was -29,6 for quarter-on-quarter and -9,9 for year-on-year,” CZI said.
“The indicator on current situation (that is, the Situation Diffusion Index) remains negative for both quarter on quarter and year on year comparison, indicating that respondents feel that the current situation is worse off compared to the previous quarter and also compared to same quarter of 2016.
It said the SDI remained negative for both quarter-on-quarter and year-on-year comparison, indicating that respondents feel that the current situation is worse off, compared to the previous quarter and also compared to the same quarter of 2016.
While investment, production, employment and order books have increased, signalling increased activity in the manufacturing sector to maintain confidence in the market, CZI called for the implementation of the stated policies and strategies immediately.
“Further delay will result in reduced confidence in the coming period. The situation on raw material supply and speed of supplier deliveries is deteriorating. This is largely due to foreign currency shortages and CZI has in different submissions proposed an importer financed export incentive scheme to ease the foreign currency shortages,” CZI said.
“The enhancing of the nostro stabilisation facilities by $400 million as recently announced in the monetary policy statement will not be sufficient to meet the foreign currency requirements of the productive sector.”
This comes as at least five institutions have since December made much lower projections of this year’s economic growth of 4,5% envisioned by government based on what is actually happening on the ground.
In an interview with NewsDay, CZI president Sifelani Jabangwe agreed that government’s projections were too optimistic but that the BCI should be a positive indicator of an improved economy.
“You see, when you make decisions not all the information that you process is perfect, in otherwise, you are not going to add this plus that one than you know certainly the economy is going to get better. As an individual, I will sit and project the sector I serve,” he said.
“…if I do not have this index (BCI) what happens is it now becomes like your own hunch, you cannot verify it (business growth) in anyway because with business and economic cycles you must go into it at the right time.”