Zimbabwean economy poised for a rebound


There has been a barrage of attacks on Zimbabwe in recent months, with claims that the country is in a serious crisis, requiring regional, continental and international intervention. 

Zimbabwe is one of the most politically stable nations, hard at work to resuscitate an economy that has been adversely affected by poor agricultural output due to consecutive drought spells, effects of Cyclone Idai, the Covid-19 pandemic and the illegal of sanctions.

According to the thesaurus dictionary, a crisis is a time of intense difficulty or danger, a time when difficulty and important decision must be made.

That to me describes the global financial crisis during the 2007 to 2009 period, but definitely not the situation in Zimbabwe today. 

The recent noise about a “crisis” has been nothing more than fabricated acts of self-torture; self-abductions and use of old file pictures meant to depict Zimbabwe in bad light.  The claims and acts are a creation of the MDC Alliance with support from its foreign handlers, and some individual diplomats at the US Embassy in Harare, some NGOs and CSOs.

These fictitious acts are all a strategy by the MDC-A and its foreign handlers, targeted at causing their friends to impose more sanctions and further isolate Zimbabwe. They are meant to discourage foreign investors, discourage tourists from visiting Zimbabwe and cause people to turn against the Government.

In an act which will surely be condemned by posterity, South Africa has placed more emphasis on the theatrics of the MDC A and totally ignored a major crisis unfolding in Mozambique where an extremist insurgency has displaced over 310 000 people, creating an urgent humanitarian crisis. 

The World Food Programme (WFP) has reported that communities have lost access to food and income, on the other hand, the International Committee of the Red Cross (ICRC) has warned of northern parts of Mozambique being engulfed in conflict that seems to be getting worse.

Zimbabwe is doing fairly well in the economic sphere and was recently excluded from debt relief because it had paid up its arrears to the IMF.

Harare cleared its outstanding position of US$107, 9 million with the IMF in October 2016 despite being battered by sanctions for more than 20 years.

According to the Economic Intelligence Unit (EIU), in 2019 consumer price inflation was estimated at 232 percent, projected at 498.3 percent in 2020, 8.2 percent in 2022, then 5,8 percent and 5.5 percent in 2023 and 2024 respectively. 

The EIU expects that from 2020 inflation will average 498.3 percent owing to huge growth in the money supply base. 

However, from 2021 inflation will fall as this deficit financing ceases and domestic confidence in the currency is gradually rebuilt, facilitating a movement away from use of USD.

Additionally an updated IMF forecast, pointed out that, despite Zimbabwe having suffered a hard blow, from the 14th of April 2020, due to the outbreak of the COVID-19, GDP growth is expected to remain negative in 2020, at -7.4 percent but is projected to pick up to 3.7percent in 2021, supported by the recovery of the agricultural sector and industry, which constitutes 32.5 percent to GDP and employs 7 percent of the total workforce. 

Further-to-that the EIU has predicted that from 2022 onwards, the economic challenges will slowly abate, driven by improvements in energy production and in agriculture and mining output.  This will improve Zimbabwe’s foreign reserves position, supporting the currency and moderating inflation.

Moreover, the April 2020 World Economic Outlook IMF, noted that the Government of Zimbabwe announced a $18 billion Covid-19 economic recovery and stimulus package including measures to: (i) provide liquidity support to several sectors, including agriculture ($6 billion), mining ($1 billion), tourism ($0. billion), SMEs ($0.5 billion), and arts ($0.02 billion); (ii) expand social safety nets and food grants ($3.9 billion); (iii) set up a health sector support fund ($1 billion); and (iv)  upscale investments in social and economic infrastructure in Cyclone Idai affected communities.

Currently Zimbabwe is dealing with the impact of the El Nino induced drought, effects of Cyclone Idai that hit parts of Manicaland, Masvingo and parts of Midlands, and the COVID-19 pandemic.

As a result, Zimbabwe’s GDP contracted by 12.8 percent in 2019 due to poor performance in mining, tourism, and agriculture. Foreign currency and electricity shortages affected mining and tourism. Agriculture shrank about 15.8 percent due to cyclone Idai in March 2019, prolonged drought, livestock diseases, and currency shortages reducing the availability of inputs.

A crisis caused by natural disaster is what Zimbabwe is successfully addressing, by rebuilding infrastructure in the affected areas to include, schools, roads and bridges, and ensuring that vulnerable families are provided with food, water and proper sanitation. 

President Mnangagwa has lived up to his promise, during his inauguration of August 2018, that he will rebuild the economy, the infrastructure, open up Zimbabwe for business, create employment, and fight corruption and to be a listening President, he has lived up to his word.

His Cabinet ministers are working ways to help pull Zimbabwe out of the doldrums of the past four decades. 

In 2018, the Minister of Finance and Economic Development Professor, Mthuli Ncube came up with some hard but workable policies, anchored on the Transitional Stabilisation Policy of 2018-2020, which saw the economy significantly stabilising. 

According to the 2020 Index of economic freedom, austerity measures, the Transitional Stabilisation Program 2018/20 and attendant monetary reforms, gave an opportunity of recovery and quick turnaround in the real sector by 2020/21.

In the medium term, however, fiscal and monetary reforms are expected to stabilise the economy and begin to generate positive results.

The insurgency that is taking place in Mozambique is a real crisis, and for people to totally ignore it in order to please western powers is dangerous.

This act of negligence may plunge the region into a true crisis.  People are shot in broad day light by terrorists, they are dying in numbers.  Roads and rail have been disrupted, blocking economic progress. 

The MDC-A’s Nelson Chamisa, Joanna Mamombe, Tendai Biti, Jacob Ngarivhume and their Western handlers should sober up and focus on the terrorist threat.

Zimbabwe, like all other countries in the world, is facing three shocks, the COVID-19 pandemic, climatic-related drought and macro-economic policy challenges.

Similar to all countries globally, most sectors of Zimbabwe’s economy have also been affected by the COVID-19 pandemic, but not to a point of earning the “crisis” title. This is a challenge that even the super powers the USA, China and UK are also battling with.  The COVID-19 pandemic is not unique to Zimbabwe, a global challenge, where we are doing everything we can to come out at the end of the tunnel with minimum damage.  To blame the Government for problems emanating from a global disease and from sanctions is the height of hypocrisy.

Meanwhile, in June 2020 Government increased all civil servants salaries and pensions by 50% and also announced it would continue to pay US$75 to civil servants and US$30 to pensioners to cushion them from the COVID-19 pandemic effects and the challenging economic situation until December 2020.

In March 2020, the central bank moved from a managed floating exchange rate system to a fixed exchange rate management system. The bank also revised the Foreign Exchange (FX) allocation priority list to improve allocation efficiency in light of the prioritize COVID-19 pandemic. Faced with acute foreign currency shortages, in June 2020 the authorities introduced a foreign currency auction system and reinstated the 30 day limit of liquidating surplus foreign exchange receipts from exports which was further revised to a 60-day limit for FX liquidation. This has been very effective in stabilising the runaway foreign exchange rate that was contributing to a rise in consumer goods.

In line with the President’s mantra that Zimbabwe is open for business, processes for starting a business and obtaining permits have been eased in Zimbabwe, a plus for possible investments.  Obtaining a permit to carry out a business used to be a very tedious process, but with the coming in of the New Dispensation, it’s now simplified under the ease of doing business reforms.

Zimbabwe has done relatively well in protecting its citizens from runaway COVID-19 infections, by enforcing WHO guidelines like all other global countries.  It has catered for its frontline workers, provided food aid and monetary hampers to vulnerable families.  Doctors and nurses are all at work and schools are scheduled to reopen in phases starting with the exam writing classes on 28 September 2020, a clear indication of prevailing peace and progress.  Industries have slowly started to reopen with the easing of COVID-19 restrictions, while our Tourism industry is set to re-open as from 1 October 2020, as both domestic and international flights resume.  Farming preparations are underway with the Government implementing Pfumvudza, a climate proof farming method meant to maximise production per unit area, in efforts to enhance food security at household level.  We should not allow the region to be swayed by fake news to the extent of ignoring the real crisis and focusing on the fantasies of those who lost elections. – Herald