31 May 2013

Zimbabwe: Poll Date: Think About Economy

editorial

THAT Zimbabwe's economy is hamstrung by a toxic political environment is no longer news to the general populace.

Now, calls for the urgent restoration of an acceptable democratic order in Zimbabwe have been getting louder.

While no date for general elections has been set yet, President Robert Mugabe and his Zanu PF party have repeatedly said elections will be held by June 29 this year.

However, the feasibility of this date has been repeatedly challenged by other political parties and various organisations -- including this newspaper -- who say there is still a lot of work to be done, particularly on key reforms required for a credible and peaceful contest which will lead to an acceptable outcome, whichever way the dice rolls.

One dimension that has come out loud and clear though is growing weariness of the Zimbabwean economy with delays in fixing a date for the polls. A fortnight ago, the Zimbabwe National Chamber of Commerce called for the elections to be held soon. This week, Finance minister Tendai Biti said continued delay in holding the elections was hurting the economy. Business executives say as much.

And rightly so. Given that businesses need to plan ahead, even without necessarily building and pontificating on the eventual outcome, it is always important for business leaders to understand when major events will occur such as elections since these affect strategic and operational decisions. Foreign investors are also sitting on the fence, watching and waiting impatiently for this process to play out. All the waiting is at a cost in the form of delayed implementation or commencement of investment projects. Time is money!

The Zimbabwe Investment Authority is presently sitting on approved foreign direct investment projects with a nominal value of more than US$1 billion. Bilateral and multilateral donors are also keen to satisfy themselves that not only the election outcome, but the process leading to that outcome, is acceptable before opening the taps of financial support. The continued delays in announcing the elections date is thus imposing a latent, but large cost on the economy.

Portfolio inflows through the Zimbabwe Stock Exchange, the potential recapitalisation of banks and other local companies by foreign investors, also hinge on the elections. Biti's comments earlier this week are spot-on. A major challenge of investing in Zimbabwe has always been the dire lack of clear economic direction and sound policies.

While the Global Political Agreement, that has been the basis of governance in Zimbabwe since 2009, ushered in a semblance of economic stability, it has been characterised by the discordant agendas of the two main political camps in government -- Zanu PF and the Morgan Tsvangirai-led MDC. This has been at a great cost which, now more than ever , needs to be capped. Each of the two major political camps contend that an outright victory by their parties will lead to greater clarity of economic policy going forward.

It is imperative that an election date be announced once all the electoral reforms needed to hold free, fair, credible and acceptable elections are implemented. If not for the politics, the main political protagonists should at least do it for the economy.

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