Financial Gazette (Harare)
Shame Makoshori
16 May 2008
Harare — BRAMWEL Bushu, an executive with Harambe Holdings, was last week elected chairman of the National Bakers Association (NBA), replacing Vincent Mangoma who declined a second term due to work-related pressures.
BRAMWEL Bushu, an executive with Harambe Holdings, was last week elected chairman of the National Bakers Association (NBA), replacing Vincent Mangoma who declined a second term due to work-related pressures.
Bushu will be deputised by Owen Murumbi, a finance director with Bakers Inn and a Mrs Makomva of Auflan Bakery.
Mangoma, the outgoing NBA chairman, said the rapidly deteriorating economic environment in Zimbabwe has come to a point where it has made it "impossible" or "extremely unfavourable" to continue business operations in the country.
Mangoma told the association's 125 members at an annual general meeting in Harare last week that the introduction by government of a price-monitoring agency had devastating effects on the bakery industry in the country.
Last year, the government established the National Incomes and Pricing Commission whose mission is to monitor pricing trends and considering applications for pricing adjustments from producers and retailers.
"This report comes at a time when the economic environment in the country is characterised by conditions which make it extremely unfavourable if not impossible to operate business in Zimbabwe," Mangoma said in his annual report.
"There has been no relenting on instability with the macro economy continuing to be characterised by high inflation, critical shortages of foreign currency and very low business confidence. That the baking industry baking industry continues to operate against this negative background is indeed testimony of our members' resilience and, the tenacity on the part of the association in standing up for the rights of its rank and file," Mangoma said.
He said price controls, which hit the baking industry since September 2006 when government pounced on and arrested top baking industry executives, should be stopped to allow their businesses to thrive under the hostile operating environment.
More than 60 percent of wheat that the industry is using now is imported due to the serious shortages on the market, according to industry figures shown to The Financial Gazette this week.
"The NBA holds the view that price controls are unwarranted and that producers should be allowed to charge realistic market based prices for their products," the NBA chief added.
"The government should devise other ways of protecting vulnerable groups from the vagaries of inflation," Mangoma added.
Zimbabwe's baking industry requires 450 000 metric tonnes of wheat per annum to operate at full throttle but Mangoma's report said during 2007, the industry was plagued by massive shortages, with a 300 000 deficit of wheat being experienced.
This triggered a significant fall in capacity underutilisation, which hovered at a precarious 10 percent during the period under review.
"Unless and until local farmers improve wheat production, the future for the baking industry in Zimbabwe remains bleak," he added.
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