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Running on empty: Zimbabwe’s empty business towers, malls epitomise subdued economy

A ZIMBABWEAN businessman crosses from the South African border to Zimbabwe after stocking bread for his clients in Beit Bridge. Picture: Paballo Thekiso.

A ZIMBABWEAN businessman crosses from the South African border to Zimbabwe after stocking bread for his clients in Beit Bridge. Picture: Paballo Thekiso.

Published May 20, 2022


INCREASINGLY empty business towers and shopping premises epitomise subdued business activity in the central business district of Zimbabwe’s capital, Harare, coinciding with price increases that the government now hope to stop by removing duty on goods imported from South Africa and other neighbouring countries.

Downstairs at the office towers and across the Harare city centre’s major roads, informal traders duck police and council authorities. Inside the few supermarkets dotted around the city, prices change daily, and sometimes twice a day as operators adjust to the reality of quick-paced exchange rate fluctuations.

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“We have a new system whereby prices are changed at head office. Sometimes, the price that’s on the shelf is not matched by the one obtaining at the till-point because the changes are just too much,” one merchandiser with a large retail chain in Zimbabwe said in an interview.

Rental reviews for residential, office and commercial property are likely to be next, property managers said. Property companies are reporting subdued occupancy levels for buildings in the central business district of Harare.

This comes as more companies are closing shop, while other property owners as others turn their commercial properties into informal trading spaces.

“The property market remains subdued with low demand for space particularly in the CBD office sub-market. This is mainly attributable to low economic activity and inflation induced erosion of purchasing power and disposable incomes,” Zimbabwe Stock Exchange (ZSE)-listed property developer, Mashonaland Holdings said yesterday.

Property and real estate companies are having to review rentals on a quarterly basis “to preserve value in view of the prevailing inflationary” environment, executives at Mashonaland Holdings added.

Another ZSE-listed property company, First Mutual Properties, said this month that “activity on the property market continues to experience demand and supply imbalances, with CBD offices, high density suburban shopping centres and the specialised industrial sectors” being the most affected.

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Zimbabwe’s economic decline, worsened by supply chain disruptions owing to the Ukraine war, has been a headache for President Emmerson Mnangagwa’s administration.

Amid price increases for basic foodstuff, Mnangagwa’s administration is now seeking to manage the situation by allowing citizens to import basic household commodities duty free.

“The Zimbabwe Revenue Authority is hereby authorised to suspend duty on the following products (rice, flour, cooking oil, margarine, sugar, maize meal, washing powder) for a period of six months,” secretary for Finance, George Guvamatanga, said in a letter to the revenue authority dated May 16.

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Economists, however, say the move to allow duty free importation will weigh against local producers at a time when capacity utilisation has started to creep up.

The “property development market continues to witness limited investments due to constrained liquidity” to fund property developments, a situation that was worsened by Zimbabwe’s 10-day suspension of lending activities by banks.

“The (central) bank wishes to advise the public that the temporary suspension of lending services by banks has been lifted with immediate effect,” Mangudya said Tuesday morning.

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However, the lifting of the suspension on lending by Zimbabwean banks “does not apply to those entities that are under investigation by the Financial Intelligence Unit (FIU) for abusing loan facilities to the detriment” of the economy, added Mangudya.


Related Topics:

macro economics