Major Constraints on Small Business in Zimbabwe - 1819 Words

Introduction It is an undeniable fact that small business has become a crucial part of the business environment of any country. What is the small business? A small business is owned and operated privately, and it has a few employees and a small volume of sales. Depending on the countries and industry, the legal definition of small is usually different. In Australia, â€Å"a small business is defined by the Fair Work Act 2009 as one with fewer than 15 employees†( Fair Work Act 2009). Even thought individual small business only creates a small number of position for unemployed people, the quantity of various small businesses is enormous. They together can provide a lot of positions and play a significant role in the economy. The small†¦show more content†¦Thirdly, the corruption arouses the national unrest and economic instability, which creates an instable investment environment for those small businesses. As Mangwende puts its, â€Å"Critics this week told The Financial Gazett e that Zimbabwe’s rating will further deter investors because no-one in their right senses would want to invest in a country whose future is uncertain†(Mangwende 2003). Sub-section 2. Constraint from inflation The inflation in Zimbabwe is another significant issue that affects the growth of small businesses. The inflation situation is very severe as we can learn from the following facts. â€Å"Zimbabwe is the first country in the 21st century to hyper inflate. In February 2007, Zimbabwe’s inflation rate topped 50% per month, the minimum rate required to qualify as a hyperinflation (50% per month is equal to a 12,875% per year)† (Hanke 2009). In 2007, International Monetary Fund (IMF) reckon of 150,000%. From the central Statistical Office of Zimbabwe estimated the inflation rate is 231,000,000% and the central bank issued the 100 billion dollar note in 2008 as indicated in the Table below. During 2009, the Mugabe regime undergo the biggest inflation crisis that is the second worst inflation in the history and then the central bank issued $100 trillion banknote. The price is doubling in every 1.5 days. â€Å"How bad is inflation in Zimbabwe? Well, consider this: at a superma rket near the centre of this tatterdemalion capital, toilet paper costsShow MoreRelatedHistorical Background Of Manufacturing Smes1217 Words   |  5 Pagesbackground of manufacturing SMEs in Zimbabwe. The other issues to be highlighted and discussed include problem statement, purpose or justification of the study, objectives of the study, research questions, research hypothesis, significance of the study, research assumptions, scope or delimitations of the study, ethical considerations and a summary. 1.2 Background to the study (60) Small to medium enterprises (SMEs) have become increasingly important to Zimbabwe s economic growth. 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