adminMartin Kadzere : Senior Business Reporter
LAST week, the Zimbabwe Association of Pension Funds held its annual conference and annual general meeting in Johannesburg, South Africa at the Birchwood Hotel and OR Conference Centre. About 400 delegates from Zimbabwe attended the conference held from May 11 to 14. During the past five years, the ZAPF had held its conferences at the Elephant Hills in Victoria Falls.In choosing the foreign venue, the ZAPF said it took into account the need to use a place that would provide adequate accommodation and conference facilities to the delegates.
Holding the event in Victoria Falls could have also resulted in members incurring additional costs of hiring a tent as all the hotels in the resort town did not have the capacity to provide a conference room for the increased number of delegates. The association said a cost saving of 20 percent per delegate was realised by holding the conference in SA.
This shows how the multi-currency system anchored by the US dollar has made Zimbabwe uncompetitive. The sharp fall in the rand against the greenback augurs well for the South African domestic tourism industry while making tourism local products expensive.
Recently, Reserve Bank of Zimbabwe Dr John Mangudya said the strong United States dollar has continued to make the country a high cost producing nation, a very expensive tourist destination as well as a fertile ground for capital flight and externalisation.
“It is an issue of destination competitiveness,” said a senior hospitality executive.
“We are no longer competitive due to the slide of the rand and other currencies around us. Because we are using a stronger currency than the rand, South Africa has become cheaper.”
The executive said with the cost structures that most of the hotels have, local operators were unable to further reduce prices “as this would push them out of the business”.
While SA has become a cheaper destination, economic analysts noted the outbound tourism has become a major avenue for “leakage of foreign currency”.
“This should also be taken in the context that we are losing foreign currency from outbound residents and potential inbound tourists,” Harare-based economist Ms Teclar Nyara said.
“The unfortunate thing is we cannot legislate consumers. We have to be competitive.”
Buy Zimbabwe economist Kipson Gundani said while holding the conference in South Africa could have been cheaper, the cost difference was marginal and could have only been felt at household level.
Mr Gundani said it was wise for the pension houses to bear the extra costs and support the businesses employing their members.
“This is a classical example of economic ignorance and debauchery of the fabric that defines business leaders of today. One would expect such decisions to be made by household importers. To have a fully fletched association exporting a conference to South Africa, I suppose boggles the mind of many people,” said Mr Gundani.
“This is being insensitive to the situation prevailing in the country. This further illustrates short termism and irrational exuberance, without really quantifying the economic impact of such an expenditure even to their own business.
“This is more of a mindset issue as opposed to a cost issue. Why not hold the conference in Harare of Kadoma for instance? Surely that will be way cheaper than having the conference in SA. With this level of leadership, thinking and decision making, then we should surely lament not anybody else but ourselves.”
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