THERE is no company that can survive in Zimbabwe without a strategy for the informal economy, now constituting over 70% of the country\u2019s gross domestic product (GDP), economist Eddie Cross has said.<\/p>\n
Addressing Confederation of Zimbabwe Industries Matabeleland chamber annual congress last week, Cross said local companies should have a strategy on how they can tap into the informal sector for survival.<\/p>\n
\u201cThen there is the issue of the informal sector \u2014 now over 70% of our GDP. This is both a problem (how do we collect taxes) and an opportunity. It means that our real economy is three times the size of the formal sector. No company can survive in this country without a strategy for the informal economy,\u201d Cross said.<\/p>\n
\u201cI was asked in 2019 by the Minister of Finance (Mthuli Ncube) to help a struggling manufacturer in Harare with understanding the economic and policy environment and showing them how to manage both. I met with the chairman, chief executive officer (CEO) and several other executives and explained the situation with regard to foreign exchange, pricing and managing opportunity,\u201d he said.<\/p>\n
Cross said the chairman turned to his CEO and said: \u201c\u2018On Monday, we change our pricing. We form an export division and we start implementing an operation to get into the informal market with our products\u2019.<\/p>\n
\u201cLast month, they reported record sales and strong regional demand. The chief finance officer said to me the other day, \u2018the only thing we no longer do is budget, a budget is worthless\u2019.\u201d<\/p>\n
On the local currency crash, Cross said there were many reasons, but most of them were self-inflicted.<\/p>\n
\u201cWe have no confidence in ourselves or our institutions. There are good reasons for that, but surely we should be able to recognise the difference between 2008 and 2020. We all play the game of money-changing, it has become one of the main sources of employment for our people, but at its heart are persons who produce nothing, but simply play games with our currency,\u201d he said.<\/p>\n
\u201cEvery time it depreciates, they make millions. As a result, people scramble for the exit and the Old Mutual Implied Rate soars. People with surplus RTGS [Real Time Gross Settlement] rush to convert it into United States dollars to protect its value. This is completely rational until the ponzi game stops. When it does, many will lose, big time.\u201d<\/p>\n
THERE is no company that can survive in Zimbabwe without a strategy for the informal economy, now constituting over 70% of the country\u2019s gross domestic product (GDP), economist Eddie Cross has said. Addressing Confederation of Zimbabwe Industries Matabeleland chamber annual congress last week, Cross said local companies should have a strategy on how they can […]<\/p>\n","protected":false},"author":84,"featured_media":18986,"comment_status":"open","ping_status":"closed","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[3,6],"tags":[354,807],"class_list":{"0":"post-25832","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-all-news","8":"category-economy","9":"tag-gdp","10":"tag-mthuli-ncube"},"yoast_head":"\n