Bad rep scuttles growth

JOHANNESBURG - A new report released this week by an international business thinktank warned that Zimbabwes reputation as a bad debtor would scuttle the revival of the countrys struggling health sector.

The report, entitled Healthcare Overview in Zimbabwe, released by Business Monitor International from the United Kingdom, said the resultant lack of investment would limit the refurbishment of vital healthcare infrastructure and cause the unavailability of some medicine.

Over the course of Zimbabwes economic slump, the countrys once vibrant pharmaceutical industry had shrunk by over 50 per cent, and by 2008, capacity utilisation stood at a mere 20 per cent. Although the economy has since recovered,

significant challenges remain for local manufacturers mainly in the form of lack of capital, reads the report.

The country has struggled to attract capital and access loan facilities from international lenders due to the governments unfavourable credit record. Limited access to capital has therefore inhibited investment in new plants and equipment,

and thus production levels have remained low. Without an optimally operating manufacturing industry, shortages of affordable medicines will remain unresolved.

Zimbabwe , whose health sector is a far cry from the 1980s when it was one of the best in the continent, has a reputation of failing to honour debts. In December the International Monetary Fund (IMF) forecast Zimbabwes domestic and foreign debt to increase by US$1 billion to US$8,6 billion by the end of that year.

The debt will be almost three times the GDP estimated at US$3,5 billion. Such a reputation has seen international investors adopt a cautious approach before working with Zimbabwe . A lack of investment has resulted in the economy growing at a snails pace since the formation of an inclusive government in 2009.

Post published in: Economy

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