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‘Zim failing to attract FDI’

Business Times is running a column of a buildup to Independence Day on April 18 and the publication is looking into the entrepreneurs who have walked the journey from 1980 to the present day.

Zimbabwe Bearings Private Limited Philbert Alexander Jumbe, will explain the transformation of his business in the past 40 years.

Economic experts say Zimbabwe’s economy was involved in four phases which comprises of high growth (1980-2000), hyperinflationary (2000-2008), economic recovery (2009- 2016) and recession (2016 to present).

Business Times Reporter Livingstone Marufu (LM) discussed with Philbert Jumbe (PJ) on how he managed to continue operating in the turbulent environment.

LM: Who is Philbert Jumbe ?

PJ: Philbert Alexander Jumbe is the founder and chief executive of Zimbabwe Bearings Private Limited who provided 40 years of roller bearings service to the nation despite the turbulent times that the local companies have faced.

He is the Chairperson of the Zimbabwe Bearings and PAJ Holdings group of companies, based in Harare, Zimbabwe.

He holds a Bachelor of Accounting Science degree (SA) and is an Associate Member of the Chartered Institute of Management Accountants and of the Chartered Global Management Accountants (UK).

In addition, he is a holder of a Diploma of Competence in Bearing Technology (UK) as well as a Para Legal Practitioner’s qualification (SA).

In June 2017, he was awarded the MSc Strategic Business Management with Merit by the Manchester Metropolitan University (UK).

A past president of the Zimbabwe National Chamber of Commerce, Phil was Vice Chairman of the Conference of Chambers of Commerce and Industry of the African, Caribbean and Pacific (ACP) Countries.

He was a rapporteur of the Conference of the Group of 77 held in Yaunde, Cameroon in 1990.

He is a past chairman of the Federated Chambers of Commerce and Industry (FCCI) and the Preferential Trade Area of Eastern and Southern Africa (PTA) and until recently he was the Chairperson of the Education and Development Commit- ‘Zim failing to attract FDI’ tee of the Institute of Directors (IoDZ) Zimbabwe.

Jumbe is a member of the Bible Society of Zimbabwe as well as the International Bible Society and has several honoraria including Honorary Life Member of the Zimbabwe National Chamber of Commerce, Honorary Life Member of the Jairos Jiri Association (for the disabled), and Honorary Life Member for the Zimbabwe Association for the Welfare of Children.

Phil is currently a Student for a PhD programme in International Trade. In July 2019, he published a book ‘Doing the Most Good as a Servant of God in the 21st Century’.

LM: What inspired you to form Zimbabwe Bearings Private Limited?

PJ: I was a member of Harare Chamber of Commerce (which was later called (Zimbabwe National Chamber of Commerce) where various black business people from various disciplines met to discuss business and economy.

Whilst I was there I undertook the need to form the company.

More importantly, I saw that farmers in thriving farming business use tractors, lorries and other machinery, the same with the transport sector and also manufacturing sector.

LM: What is Zimbabwe Bearings?

PJ: Zimbabwe Bearings Private Limited, a family-owned private company, commenced operations in Harare, Zimbabwe on May 5, 1981, importing roller bearings and distributing same in Zimbabwe under an agreement of Authorised Distributorship signed between the company and FAG Kugelfischer Georg Schafer of Schweinfurt, Germany.

We also operate, PAJ Holdings Private Limited, a property management and development company to diversify our operations.

LM: What are the notable achievements that Zimbabwe Bearings has made over the years?

PJ: Zimbabwe Bearings entered into an Authorised Distributorship Agreement with FAG Kugelfischer Georg Schafer of Schweinfurt, Germany, for the distribution of FAG roller bearings in Zimbabwe; earning a listing on its ‘FAG Service on Five Continents’.

1985: Accepted as a Barter Trading Partner in Zimbabwe. 1985:Won a Gold Medal as a Chinese Trading Partner. 1986 :Obtained a listing of the United Nations Industrial Development Organisation (UNIDO) as a potential Bearing Manufacturer in Zimbabwe ( Targeting employment creation and generation of export earnings).

1987: Won a German Commodity Import Programme (CIP)Tender for the supply of roller bearings to Zimbabwe’s Agricultural industry. 1988: Won a Gold Medal at the Zimbabwe International Trade Fair, Bulawayo.

LM: Tell us more about your property company

PJ:This property management holding company with interests in a 6, 000 sq metre industrial buildings Complex in Msasa, Harare, shops in Bindura and residential properties in Harare was incorporated in 1988.

The management of properties entails among various other activities; preparing leases, collecting rents, reviewing terms and conditions of leases, letting properties, and carrying out maintenance work.

LM: Given that foreign currency is threatening the viability of most companies, what has differed now in terms of fetching forex on the market? PJ: Looking back to the early days of the formulation of the company, we operated in an environment of relative prosperity although this was not apparent at that time. We entered into the imports system through the avenue of what was known as ‘Emergent Businessman’.

During that time any black person who wanted to engage in imports (such as we had to do with our roller bearings) had in the first instance, to make application to the authorities which when approved entitled them to be granted a certain amount of foreign currency.

The currency was a fixed amount which had to be endorsed every quarter on Import Control Certificates.

The Certificates enabled the importer to draw an Import Licence (again every quarter) from the then Ministries of Trade and Commerce or Industry and Technology depending upon the sector to which an importer belonged.

Accessing the correct amounts of foreign currency needed was always a major problem as you always got much less than the amount demanded by your business.

In 1982, importers in Zimbabwe were shocked to be faced with what became known as the ‘October crunch’ when the levels of the amounts of foreign currency which was until then, offered to Zimbabwean importers was drastically cut.

LM: Kindly take us through the country’s economic phases and explain how the eras differ from time to time.

PJ: Despite this situation, the Zimbabwean economy performed remarkably well under the mentorship of a brilliant Minister of Finance, Economic Planning and Development, Bernard Chidzero.

From 1980-1982 economic growth was as high as 10%. The foreign exchange rate at independence was about US$1:0.85 Zimbabwe cents.

In the first ten years of Independence from 1980-1990, the Zimbabwean GDP growth averaged 5.5%, surpassing the average of the entire Sub-Saharan Africa.

This performance was propelled by favourable domestic conditions stimulated by distributive fiscal policies and opening up of the country to external markets.

After 1990 began to show signs of weakening. There was an unfavourable business environment leading to low investment, decline in manufacturing output and contraction in the country’s exports.

But a more critical period had yet to come.

The most severe period was to come after the advent of the new millennium a time which has been coined ‘the lost decade’.

Between the year 2000 and 2008, there was sustained economic decline amounting to a cumulative staggering 50% in real GDP.

This was the result of several factors: poor governance in the rule of law in the context of the land reform programme; there was capital flight leading to low investment; the international community withdrew its support and inflation rose significantly from 2000.

It reached triple figures by 2006.By 2007; it reached hyperinflationary levels before peaking at five hundred billion percent at the end of 2008.

This was fuelled by years of excessive money printing to finance public expenditure and quasi-fiscal spending by the Reserve Bank of Zimbabwe and as a result, manufacturing almost ground to a halt.

Since then, the country has been experiencing negative GDP growth generally and it is not doing much in attracting Foreign Direct Investment.

One of the biggest setbacks confronting Zimbabwe at present is the inability to attract meaningful levels of Foreign Direct Investment (FDI).

The great advantage of FDI receipts is that (whilst domestic investment is also vital) as implied in that term, the investment comes in the form of foreign currency which once available, can be used to pay for imported goods such as, equipment and spares for our agricultural and mining sectors which are essential for our economy

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