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Zimbabwe Food and Drink Report 2009
Business Monitor International, March 2009, Pages: 40
Zimbabwe Food Drink Report provides independent forecasts and competitive intelligence on Zimbabwe's food and drink industry.
The situation in Zimbabwe is growing increasingly dismal, as the human and economic crisis in the country continues to acceleration. Despite a wide range of almost insurmountable challenges, the country’s leading food and drink producers are somehow still managing to carry on with their operations, as discussed in BMI’s recently published Zimbabwe Food & Drink Report for 2009.
According to a survey carried out by the Confederation of Zimbabwe Industries, manufacturing declined by 28% in 2007 followed an 18% decline in 2006, which was attributed to a combination of factors including foreign currency shortages. Food and drinks producers are continuing to deal with a severe shortage of packaging materials, carbon dioxide, raw ingredients, clean water and fuel, forcing those companies that are still in business to severely alter how they operate. Making maters worse is the equally bleak outlook in the agricultural sector. In a country that was once the regional breadbasket, output has dropped drastically, with little new farming now taking place. With the government monopolizing the buying and selling of corn through he Grain Marketing Board, there is little incentive for farmers to continue to plant, for with the current levels of inflation, any payments received are almost immediately worthless.
Currently about half the population is at risk of starvation, the crop that should be harvested in March looks set to be a disaster, diseases such as cholera are spreading, and an estimated 80% of Zimbabweans now find themselves jobless and living in penury. International food and medical aid continues, but is continually hampered or commandeered by the regime. A recent survey conducted by the United Nations World Food Program found that the food security situation in Zimbabwe has deteriorated drastically over the past year alone. According to the findings of this survey, the proportion of people who had eaten nothing the past day had risen from zero to 12% while those who had eaten only one meal had shot up to 60% from 13% the year before.
The country is on the very edge of implosion. The current official inflation rate is 231,000,000%, but in reality probably in the billions. The payments system has effectively collapsed, and enterprises remain subject to official interference and extortion. The Zimbabwean dollar is no longer widely accepted as a valid source of any real value, and the economy now only deals in the South African rand or the US dollar. The Zimbabwe Stock Exchange (ZSE) failed to resume trading on January 5 as in previous years, for it is impossible to give investors a realistic view of any company's trading position or balance sheet in the super-hyperinflationary situation prevailing. It is equally impossible for local companies to devise any viable business plans or strategies under these circumstances, with their main goal simply to stay afloat. It is anyone’s guess how much longer this can go on before the whole system collapses. Most business activity now takes place on the black market, with only the fittest likely to survive.
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