28 November 2017

Zimbabwe: Great Hope for Economy

Photo: IRIN
Most basic commodities are not readily available on Zimbabwean shop shelves but can easily be found on the streets (file photo).

President Emmerson Mnangagwa's inauguration speech has struck the right chords in business corridors and optimism is abound the head of Government represents a fresh breath of air that has potential to ignite economic growth, but business was quick to compile a "to do" list that could define his reign.

Zimbabwe's economy has been plagued by a myriad of challenges that have had a negative bearing on the socio-economic well-being of the country's citizens.

Trade deficits, unemployment, liquidity challenges, industrial inefficiencies and inflation among other economic challenges have become synonymous with the local economy.

But the ascendancy of President Mnangagwa has brought with it optimism in the business community who view the former Vice President as pro-business.

Days after his nomination by the ruling Zanu-PF party to take over from President Mugabe, the parallel market was first to signal the good times are on the horizon with the bond note and plastic money firming against the green back.

His inaugural speech, last Friday, was also punctuated by overtures to investors who got away with assurances from the highest office in the land that Zimbabwe is open to both domestic and foreign investment.

In separate interviews, economists and business lobby groups concurred that Zimbabwe has been presented with a fresh start to economic prosperity with the ascendancy of President Mnangagwa but warned he will need to adopt firm economic fundamentals to achieve the needed success.

Confederation of Zimbabwe Industries (CZI) president Sifelani Jabangwe said business has confidence in the new President.

"We have so much confidence in the incoming President and that he has what it takes to create a conducive environment for business to thrive," said Mr Jabangwe.

"Our confidence primarily comes from the manner in which he executed the Command Agriculture which made sure Zimbabwe, for the first time in a very long-time the country had a bumper harvest.

"The recovery signs that our industry has been showing are a result of protectionist policies like SI64 and our hope is these will be kept so that capacity continues to grow and we can also create jobs.

"They are also good for Foreign Direct Investment in that once they invest locally, the investment is protected and shielded," he said.

Zimbabwe National Chamber of Commerce (ZNCC) CEO, Mr Christopher Mugaga was impressed by the President's call to return Zimbabwe to the international community and as well as promoting re-engagement initiatives which had been started by former Finance Minister Patrick Chinamasa.

"Corruption should be rooted across the board regardless of who is committing it," said Mr Mugaga.

"Retain Chinamasa as the Minister of Finance as he had an impressive roadmap of re-engagement with Breton Woods and we need to ride on that progress," he said.

Mr Mugaga said as the President highlighted in his speech, there is need to start the process to rejoin the Commonwealth group of nations as this will go a long way in addressing negative perception issues currently associated with the country.

Economist, Persistence Gwanyanya, said it's quite comforting that - among other aspects - President Mnangagwa acknowledged the importance of currency stability and committed to deal with the current cash crisis.

"Clearly achieving this imperative (currency stability) would depend on the level of confidence in the ability of the new administration to deal with key economic issues," said Mr Gwanyanya.

"We saw this recently when the cash premiums fell by almost 100 percent in the two weeks following the intervention of the army and subsequent resignation of President Robert Mugabe.

Confederation of Zimbabwe Retailers marketing and stakeholder relations director Alois Burutsa, said although there is excitement and optimism around President Mnangagwa's rise, his Cabinet choices will have a bearing on which direction the country takes from here.

"The Cabinet to be set up by President Emmerson Mnangagwa is going to set the direction as to where the economy might be heading to," said Mr Burutsa.

"But as industry we believe the main challenge that needs to be addressed with immediate effect, is that of foreign currency.

"Industry needs foreign currency badly to procure the raw materials. If possible the President should invite a team of experts including bankers, industrialists among others to find ways to address this foreign currency issues.

"Going forward, ministers must deliver and be accountable, parastatals should start performing and their heads must be accountable.

"We don't want a situation where someone stays on the job despite poor performance of the parastatal," said Mr Burutsa.

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