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AutoPayPAYROLL AND HR
SYSTEMSCONFERENCE
Presentation by John Robertson
CONSUMER PRICE INDEX Re-based: December 2008 = 100
88
92
96
100
104D
ec Jan
Feb
Mar
Apr
May
Jun
Jul
Aug Se
p
Oct
Nov Dec Jan
Feb
IND
EX: D
ec 2
008=
100
US DOLLAR PRICES
Robertson Economic Information Services
ALL ITEMS INDEX
-0,7%
CONSUMER PRICE INDEX Re-based: December 2008 = 100
88
92
96
100
104D
ec Jan
Feb
Mar
Apr
May
Jun
Jul
Aug Se
p
Oct
Nov Dec Jan
Feb
Mar
IND
EX: D
ec 2
008=
100
US DOLLAR PRICES
Robertson Economic Information Services
ALL ITEMS INDEX
+3,5%
7,0
7,5
8,0
8,5
9,0
9,5
RA
ND
PER
U.S
. DO
LLA
R
Robertson Economic Information Services
RAND PER U.S. DOLLARApril 1 2009 to April 23 2010
| Apr | May | Jun | Jul | Aug | Sep | Oct | Nov | Dec | Jan | Feb | Mar | Apr
2009 | 2010
==
EXCHANGE RATE INDEX Base: Feb 25 2010=100: Y, R, £ & C per US$
90
95
100
105
INDE
X: F
EB 2
5 20
10=1
00
RAND
EURO
POUND
YEN
Robertson Economic Information Services
US$
FEB MARCH APRIL
020406080
100120140160
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Maize Wheat Tobacco Cotton Soya beans Tea Coffee Citrus Sugar Dairy Beef
AGRICULTUREProduction Volume Indices: 2000=100
SUGARCOTTONTEACITRUSDAIRYBEEFSOYAMAIZETOBACCOCOFFEEWHEAT
IND
EX: 2
0 00
= 1 0
0
MINING PRODUCTION BASE METAL & MINERAL ORES
0100 000200 000300 000400 000500 000600 000700 000800 000900 000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Asbestos Chrome Ore Iron Ore Lithium minerals Nickel Phosphate
TON
NES
Robertson Economic Information Services
0
20
40
60
80
100
120
1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009
MANUFACTURING MANUFACTURING All GroupsAll Groups Annual IndicesAnnual Indices
IND
EX: 1
990
= 1
00
Robertson Economic Information Services
- 82%
0
50
100
150
200
250
2008 2009
MANUFACTURING EXPORTSUS$ Value of Annual Shipments
US$
’mil l
ions
pe r
yea
r
Robertson Economic Information Services
EMPLOYMENT: AGRICULTURE
0
50
100
150
200
250
300
350
40019
80
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
Thou
sand
s of
Em
plo y
ees
EMPLOYMENT: MINING
0
10
20
30
40
50
60
7019
80
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
Robertson Economic Information Services
Thou
sand
s of
Em
plo y
ees
MINING PRODUCTION PLATINUM
01 0002 0003 0004 0005 0006 0007 000
2001 2002 2003 2004 2005 2006 2007 2008 2009Robertson Economic Information Services
KIL
OG
RA
MS
GOLD PRODUCTION VOLUMES
05 000
10 00015 00020 00025 00030 000
1997
1998
1999
2000
2001
2002
2003
2004
2005
2006
2007
2008
2009
Robertson Economic Information Services
KIL
OG
RA
MS
PER
YEA
R LOWEST ANNUALOUTPUT
SINCEPRE-1907
MINING PRODUCTION NICKEL
0
2 000
4 000
6 000
8 000
10 000
12 000
2001
2002
2003
2004
2005
2006
2007
2008
2009
TON
NES
PER
YEA
R
Robertson Economic Information Services
MINING EXPORT REVENUES US$’ millions
0
200
400
600
800
1000
2007 2008 2009
US$
’mill
ions
Robertson Economic Information Services
0200400600800
1 0001 2001 4001 6001 800
2007 2008 2009
TOTAL EXPORTSUS$ Value of Annual Shipments
US $
’mil l
ions
pe r
yea
r
Robertson Economic Information Services
EMPLOYMENT: MANUFACTURING
0
50
100
150
200
25019
80
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
Robertson Economic Information Services
Thou
sand
s of
Em
plo y
ees
EMPLOYMENT: CONSTRUCTION
0102030405060708090
10019
80
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
Robertson Economic Information Services
Thou
sand
s of
Em
plo y
ees
EMPLOYMENT: DISTRIBUTION, HOTELS & TOURISM
0
20
40
60
80
100
12019
80
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2005
2007
2009
Robertson Economic Information Services
Thou
sand
s of
Em
plo y
ees
0
200
400
600
800
1 000
1 200
1 40019
80
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
TOTAL FORMAL EMPLOYMENTAnnual Averages
Robertson Economic Information Services *Estimates
LOWESTFIGURESINCE
1970
Thou
sand
s of
Em
plo y
ees
BALANCE OF PAYMENTS2010 Projections
0,00,51,01,52,02,53,03,5
IMPORTS
Billi
ons
of U
S do
llars
EXPORTS
Source: Ministry of Finance
BALANCE OF PAYMENTS2010 Projections
0,00,51,01,52,02,53,03,5
IMPORTS$3,4 billion
Billi
ons
of U
S do
llars
EXPORTS$1,9 billion
Source: Ministry of Finance
$1,5 billion B of P Gap
HOURLY WAGE COMPARISONS
0,00 0,50 1,00 1,50 2,00 2,50 3,00 3,50
BRAZILCHINAINDIA
INDONESIAMALAWI
MALAYSIAPAKISTAN
PHILIPPINESTHAILAND
VIETNAMZAMBIA
ZIMBABWE
US$ per Hour
HOURLY WAGE COMPARISONS
0,00 0,50 1,00 1,50 2,00 2,50 3,00 3,50
BRAZILCHINAINDIA
INDONESIAMALAWI
MALAYSIAPAKISTAN
PHILIPPINESTHAILAND
VIETNAMZAMBIA
ZIMBABWE
US$ per Hour
US$ per hour now demanded
GOVERNMENT WAGE BILL2010 = 64% of Revenue
0
500
1000
1500
TOTALBUDGETREVENUE GOVT.
WAGEBILLU
S$ ’b
illio
ns
MINISTRY OF FINANCE INTENTIONS:
• Public sector wages must be cut from 18% to 8% of GDP•Public sector wages must be cut from almost 70% of Tax Revenue to below 30%• Public sector wages are therefore capped at current levels
Zimbabwe’s Total Populationand Formal Sector Employment
0
20
40
60
80
100
120
14019
91
1993
1995
1997
1999
2001
2003
2005
2007
2009
IND
EX: 1
991
= 1
00
Robertson Economic Information Services
POPULATION
EMPLOYMENT
Zimbabwe’s Dependency Ratio -Formal Employment:Population
02468
10121416
1991
1993
1995
1997
1999
2001
2003
2005
2007
2009
DEP
END
ENTS
PER
EM
PLO
YEE
Robertson Economic Information Services
DEPENDENTS PER
FORMAL SECTOR EMPLOYEE
ZIMBABWE:GDP ANNUAL % CHANGE
-15
-10
-5
0
5
10
15
Year
-on-
Year
Gro
wth
%
1980
1982
1984
1986
1988
1990
1992
1994
1996
1998
2000
2002
2004
2006
2008
Source: CSO + IMF + Robertson Forecasts
LANDREFORM
GROSS DOMESTIC PRODUCTUS$ per year per person
0100200300400500600700800900
1000
GD
P pe
r Cap
ita in
US $
1980
19
8119
8219
8319
8419
8519
8619
8719
8819
8919
9019
9119
9219
9319
9419
9519
9619
9719
9819
9920
0020
0120
0220
0320
0420
0520
06
One US dollara day level
Robertson Economic Information Services
HOURLY WAGE COMPARISONS
0,00 0,50 1,00 1,50 2,00 2,50 3,00 3,50
BRAZILCHINAINDIA
INDONESIAMALAWI
MALAYSIAPAKISTAN
PHILIPPINESTHAILAND
VIETNAMZAMBIA
ZIMBABWE
US$ per Hour
US$ per hour now demanded
TOTAL DEPOSIT BASEheld by 26 banking institutions
in Zimbabwe on January 10 2010:
US$1 406 374 232
Robertson Economic Information Services
• Botswana US$5 666 000 000• Mozambique US$3 418 000 000• Tanzania US$5 476 000 000• Zambia US$2 680 000 000• Zimbabwe US$1 406 000 000
TOTAL DEPOSIT BASEheld by banking institutions
in regional countries 4th Quarter 2009:
Robertson Economic Information Services
BANK DEPOSITS COMPARED
0
1
2
3
4
NU
MBE
R O
F TI
MES
NEI
GH
BOU
RS’
BAN
K D
EPO
SITS
EXC
EED
ZI
MBA
BWE’
S BA
NK
DEP
OSI
TS
Bots
wan
a
Moz
ambi
que
Tan z
ania
Zam
bia Zim
babw
e
PRODUCTION COSTS PER UNITSecure Starting Position
0
25
50
75
100
125
150
50 100 150 200 250UNITS PRODUCED & SOLD
$ C
OS T
S P E
R U
NI T
COSTING STUDYSecure Starting Position
02 0004 0006 0008 000
10 00012 00014 00016 000
0 50 100 150 200 250
Fixed overheadsSales @ $50 per unitVariable costs + fixed costs
FIXEDCOSTS
FIXEDPLUSVARIABLECOSTS
CO
STS
& R
EVEN
UE
$’ 0
00
UNITS PRODUCED & SOLD
PROFIT
BREAK-EVEN
PRODUCTION COSTS PER UNIT Overhead Costs Doubled
0
25
50
75
100
125
150
50 100 150 200 250UNITS PRODUCED & SOLD
$ C
OS T
S P E
R U
NI T
COSTING STUDYOverhead Costs Doubled
02 0004 0006 0008 000
10 00012 00014 00016 000
0 50 100 150 200 250
Fixed overheadsSales @ $50 per unitVariable costs + fixed costs
FIXEDCOSTS
FIXEDPLUSVARIABLECOSTS
CO
STS
& R
EVEN
UE
$’ 0
00
UNITS PRODUCED & SOLD
PROFIT
BREAK-EVEN
PRODUCTION COSTS PER UNIT Overhead + Variable Costs Doubled
0
25
50
75
100
125
150
50 100 150 200 250UNITS PRODUCED & SOLD
$ C
OS T
S P E
R U
NI T
COSTING STUDYOverhead + Variable Costs Doubled
0
4 000
8 000
12 000
16 000
20 000
0 50 100 150 200 250
Fixed overheadsSales @ $50 per unitVariable costs + fixed costs
FIXEDCOSTS
FIXEDPLUSVARIABLECOSTS
CO
STS
& R
EVEN
UE
$’ 0
00
UNITS PRODUCED & SOLD
LOSS
COSTING STUDYCosts Doubled, Price up 32%
0
4 000
8 000
12 000
16 000
20 000
0 50 100 150 200 250
Fixed overheadsSales @ $66 per unitVariable costs + fixed costs
FIXEDCOSTS
FIXEDPLUSVARIABLECOSTS
CO
STS
& R
EVEN
UE
$’ 0
00
UNITS PRODUCED & SOLD
BREAK-EVEN
COSTING STUDYCosts Doubled, Selling Price up 50%
04 0008 000
12 00016 00020 00024 00028 000
0 50 100 150 200 250
Fixed overheadsSales @ $75 per unitVariable costs + fixed costs
FIXEDCOSTS
FIXEDPLUSVARIABLECOSTS
CO
STS
& R
EVEN
UE
$’ 0
00
UNITS PRODUCED & SOLD
BREAK-EVEN
PROFIT
COSTING STUDYCosts & Selling Price Doubled
04 0008 000
12 00016 00020 00024 00028 000
0 50 100 150 200 250
Fixed overheadsSales @ $100 per unitVariable costs + fixed costs
FIXEDCOSTS
FIXEDPLUSVARIABLECOSTS
CO
STS
& R
EVEN
UE
$’ 0
00
UNITS PRODUCED & SOLD
BREAK-EVEN
PROFIT
WHERE DOES THE DOLLAR GO?
0%
20%
40%
60%
80%
100%
Sale Price
SALE
PRI
CE TOTAL SELLING
PRICE
WHERE DOES THE DOLLAR GO?
0%
20%
40%
60%
80%
100%
Sale Price Less Tax
Cost Price
50% Markup
SALE
PRI
CE
WHERE DOES THE DOLLAR GO?
0%
20%
40%
60%
80%
100%
Cost Price –NEEDED TO
REPLACE STOCK
Markup has to cover all costs
SALE
PRI
CE
VAT
PRICE PAID BY CUSTOMER
WHERE DOES THE DOLLAR GO?
0%
20%
40%
60%
80%
100%
Markup
MAR
KUP WHAT HAPPENSTO THE
MARKUP?
WHERE DOES THE DOLLAR GO?
0%
20%
40%
60%
80%
100%
Markup
MAR
KUP
WAGES
WHERE DOES THE DOLLAR GO?
0%
20%
40%
60%
80%
100%
Markup
MAR
KUP WAGESRENT
WHERE DOES THE DOLLAR GO?
0%
20%
40%
60%
80%
100%
Markup
MAR
KUP
WAGESRENT
UTILITIES
WHERE DOES THE DOLLAR GO?
0%
20%
40%
60%
80%
100%
Markup
MAR
KUP
WAGESRENT
UTILITIESMAINTENANCE
WHERE DOES THE DOLLAR GO?
0%
20%
40%
60%
80%
100%
Markup
MAR
KUP
WAGESRENT
UTILITIESMAINTENANCE
FINANCE
WHERE DOES THE DOLLAR GO?
0%
20%
40%
60%
80%
100%
Markup
MAR
KUP NO PROFIT UNLESS
COSTS CAN BE CUT
WHERE DOES THE DOLLAR GO?
0%
20%
40%
60%
80%
100%
Markup
MAR
KUP
WAGESRENT
UTILITIESMAINTENANCE
FINANCEPROFIT
WHERE DOES THE DOLLAR GO?
0%
20%
40%
60%
80%
100%
MAR
KUP WAGES
RENTUTILITIES
MAINTENANCEFINANCE
50% wage increase would eliminate profit
Up 50%
WHERE DOES THE DOLLAR GO?
-20%
0%
20%
40%
60%
80%
100%
MAR
KUP
100% wage increase would generate LOSS and might destroy the company
Up 100%
WAGESRENT
UTILITIESMAINTENANCE
FINANCELOSS
Noting the inflexibility of the labour market, the Minister intends to:• Review labour laws• Restore flexibility to the labour market• Ensure wages are within the capacity of the economy
MINISTRY OF FINANCE INTENTIONS: