1998 SOUTHERN AFRICA ECONOMIC ... - National Treasury

Z I M BA BW E
Z i m b a b we Stock Exchange (ZSE)
Y E A R 1 9 9 3 1 9 9 4 1 9 9 5 1 9 9 6 1 9 9 7
Number of listed companies 6 3 6 5 6 5 6 5 6 7
M a r ket cap i t a l i s a t i o n ,U S D m 1 , 430 . 4 1 , 679 . 0 2 , 105 . 0 4 , 830 . 4 2 , 283 . 7
Number of companies making issues 4 12 1 6 9
(including new, rights and bonus issues)
Value of new issues incl. rights issues, 46 . 0 96 . 4 1 . 6 62 . 4 129 . 6
U S D m
Volume of shares traded, million 2 7 2 . 3 4 5 0 . 8 4 3 1 . 2 7 2 2 . 7 1 , 1 9 7 . 2
Value of shares traded, U S D m 5 3 . 6 1 7 7 . 4 1 5 0 . 0 2 5 7 . 5 3 5 0 . 7
Number of trading day s 253 252 250 253 251
Average price-earning ratio of all 8.8 8.3 7.4 14.6 9.6
listed companies, %
Average dividend yield (annual 3.6 5.0 5.2 2.9 4.4
ave r a g e ),%
S o u rc e :Z i m b a b we Stock Exchange (1998).
Fo reign Tr a d e
About one-third of Zimbabwe ’s exports are destined fo r
regional markets comprising SADC countries, South Africa in
p a rt i c u l a r, and countries that are members of COMESA. T h e
remaining share is divided equally between the European Union
and the rest of the wo r l d . The pattern is re l a t i ve ly similar fo r
i m p o rts to Zimbabwe, with some 48 percent originating fro m
the re g i o n .
Principal exports include unprocessed tobacco, fe rro - a l l oy s ,
go l d ,n i c ke l ,cotton lint, m a nufactural products and hort i c u l t u r a l
p ro d u c t s . Deliberate effo rts are being made to encourage
higher value-added pro d u c t s . Main import goods are :m a c h i n e ry
and transport equipment, m a nu f a c t u red go o d s , chemicals and
f u e l .
Tr a d e Li b e r a l i s a t i o n
Trade regulations have been liberalised substantially during the
1 9 9 0 s . I m p o rt and export formalities and border pro c e d u re s
for road motor transport have also improved in recent times.
E x p o rt licences are still re q u i red for certain strategic go o d s
such as minerals, p e t ro l e u m , wild animals, basic agricultural
commodities (including maize, c h e e s e, citrus fruits). On the
n e g a t i ve list for imports are mainly goods that are restricted due
to health and security re a s o n s ,as well as non-monetary go l d ,
p recious and semi-precious stones.
P r i v a t i s a t i o n
Momentum in privatising state assets in Zimbabwe should be
seen within the context of the broader Economic Refo r m
S t r a t e g i e s ,and its two fold objective of retiring government debt,
and to serve as a mechanism for black empowerment .
An Inter-ministerial Committee of Ministers and Officials on
C o m m e rcialisation and Privatisation has been constituted to
e n s u re that the process is accomplished efficiently and is bro a d ly
re p re s e n t a t i ve. F u n c t i o n a l ly, the Committee deliberates on
p roposals submitted to it by line Ministries, and its decisions are
sent to Cabinet for ap p rov a l . Of the 34 submissions made, a n
estimated 44 percent has thus far re c e i ved ap p rov a l . To date
about 52 state-owned enterprises have been earmarked fo r
re s t r u c t u r i n g .In order to execute its duties effe c t i ve ly, t h e
Committee has drafted a set of guidelines to assist it in
evaluating each proposal on its merit. The guidelines are ;
• that corporations deemed to be of strategic importance will
not be privatised, but will be run on pure ly commercial basis,
• that assets with aesthetic and social value (such as mu s e u m s )
will not qualify for any form of restructuring whatsoeve r, a n d
l a s t ly
• that businesses run on commercial principles will be liable fo r
outright sale.
Thus far, t h ree prev i o u s ly gove r n m e n t - owned enterprises are
n ow listed on the local stock exchange fo l l owing successful
p r i v a t i s a t i o n . These are Dairibord , Cottcoand and the
C o m m e rcial Bank.
A Communications Bill is curre n t ly being drafted, t h e
consequence of which should culminate in the clarification of
government policy on the restructuring of the Zimbabwe Po s t s
and Te l e c o m munications Corporation into a holding company
managing four subsidiaries with responsibilities in the fo l l ow i n g
a re a s ; postal serv i c e s , t e l e c o m mu n i c a t i o n s ,m a nufacturing of
equipment and cellular network serv i c e s . The process is
u n d e rt a ken in conjunction with the World Bank.
Fo reign Di rect Inve s t m e n t
The liberalisation of the investment climate in Zimbabwe has
had a positive effect on the economy. The number of fo re i g n
d i rect investments (FDIs) ap p roved by the Zimbabwe
I nvestment Centre (ZIC) has increased from USD291.3m in
1993 to USD648.9m in 1997. F i g u res provided by the ZIC show
a re a s o n a b ly high and consistent rate of implementation of
these pro j e c t s ,h overing around 55%.
The sizeable BHP-Hart l ey Platinum investment projects valued
at USD400m is expected to commence full operation this ye a r.
A l s o, t h e re are plans by Anglo Zimbabwe to undert a ke a
p l a t i num project in the region of USD70m which should see
Z i m b a b we as the third largest platinum producer in the wo r l d ,
with annual production of over a million tons.
S e c t o r a l ly, the main beneficiaries have been commerc i a l ,m i n i n g
and manufacturing sectors.
The commercial sector increased its share of ap p roved pro j e c t s
to about 60% (USD389.3m) in 1997 compared with 48%
(USD459.7m) the previous ye a r. Both the mining and the
m a nufacturing sectors have shown a fluctuating tre n d , w i t h
1 9 9 4 ,and 1996 and 1997 re s p e c t i ve ly, s h owing strong intere s t .
In terms of origin, most investment came from the deve l o p e d
countries (USA,C a n a d a ,A u s t r a l i a ,e t c ) ,fo l l owed by Africa (South
Africa and Mauritius) and Asia (China). Contributions fro m
E u rope are negligible.
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