Stability is the tonic for business

19 Nov, 2017 - 00:11 0 Views
Stability is the tonic for business

The Sunday Mail

Taurai Changwa
A PESTEL analysis is a framework or tool used by marketers to analyse and monitor the macro-environmental (external marketing environment) factors that have an impact on an organisation.

The result of such an analysis, which is used to identify threats and weaknesses, is used in a SWOT (Strength, Weaknesses, Opportunities and Threat) analysis.

Well, PESTEL stands for (Political, Economic, Social, Technological, Environmental and Legal).he result of such an analysis, which is used to identify threats and weaknesses, is used in a SWOT (Strength, Weaknesses, Opportunities and Threat) analysis.

It is rare for business to thrive in an unstable environment as capital is always capital.

It might be beneficial to analyse how an enabling environment can affect or benefit businesses and the economy at large.

Political factors are all about how and to what degree a Government intervenes in the economy.

This includes Government policy, political stability or instability in overseas markets, foreign trade policy, tax policy, labour law, environmental law, trade restrictions and so on.

It is clear from the above list that political factors often have an impact on organisations and how they do business.

Organisations need to be able to respond to the current and anticipated future legislation, and adjust their marketing policy accordingly.

Instability generally scares off investment, while on the other hand investors are more likely to be emboldened by a conducive environment.

Zimbabwe is surely in need of capital and Government is duty-bound to ensure that at the very least the legislative environment is conducive for potential investors.

All arms of Government have to work to remove all conditions that hold back economic development.

It is heartening to learn that the doing business reforms currently underway are now having a telling impact.

This year, the country improved its doing business ranking after it gained two places to 159 out of 190 on the World Bank’s 2018 ease of doing business global rankings.

It seems there has been a gridlock on how the country is expected to move forward.

While some have been advocating for engaging with the international financial institutions, it seems some were opposed to this.

Such a situation is inimical for development.

There needs to be consensus on some of the key issues and all decisions must be based on science.

Yes, disputes may arise but they need to be resolved amicably.

Obviously, as a country we have seen the pitfalls of conflict over the years.

Opinions and views will always be different but working together to achieve common goals is non-negotiable.

Zimbabwe has been experiencing economic challenges for the past two decades and it has proved increasingly difficult to chart a new way forward.

As it stands, Zimbabwe doesn’t have its own currency, it is experiencing severe cash shortages, prices are inexplicably increasing and most roads are in poor condition.

As we prepare for the 2018 Budget, a comprehensive plan of action is therefore needed to plot the recovery of the economy.

It is about time Zimbabwe becomes mature and make decisions which promote peace and lure investors.

Clearly, some policies still need to be refined.

In as much as we want to promote our own people to run businesses, it must be fully acknowledged that currently we cannot do everything on our own.

We certainly need assistance from seasoned international players. Zimbabwe is well resourced and a simple mixture of the right ingredients will surely turn around the economy.

Stable and predictable policies are the tonic.

Tax laws should be friendly and the Zimbabwe Revenue Authority (Zimra) should also be fair to businesses.

Zimbabwe clearly has an opportunity to start again.

Buoyed by a successful 2016-2017 agricultural season, Government should ensure that it consolidates its gains by further consolidating value chains.

Currently the dislocation on the parallel market, where the premium on the US dollar continues to rise, is slowly breeding rent-seeking behaviour.

Input prices have been affected as a result.

So this needs to be attended urgently in order to rescue the situation.

The Reserve Bank of Zimbabwe seems to have done its bit, it’s now left to the fiscal authorities to ensure a comprehensive package of reforms.

This year’s budget consultations therefore have to be extensive and exhaustive in order to generate the consensus needed to move the economy forward.

But any solution that fails to meet the political, economic, social, technological, environmental and legal expectations with fall short of the comprehensive package that is needed to move forward.

The Zimbabwean economy can no longer continue on this path, it needs to be put back on the rails.

Taurai Changwa is a member of the Institute of Chartered Accountants of Zimbabwe and an Estate Administrator. He has vast experience on tax, accounting, audit and corporate governance issues. He is a director of Umar & Tach Advisory. He writes in his personal capacity and can be contacted at [email protected] or WhatsApp on 0772374784.

 

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