By Zhang Yuliang, Tichaona Chifamba HARARE Zimbabwe (Xinhua)
-- The scepter of the 2008 economic turmoil returned
to haunt Zimbabwe in 2018 when most sectors of the economy were affected by a
efforts by President Emmerson Mnangagwa to make the country more attractive for
investment, investors remain on the sidelines wanting to be sure of the
direction the country is taking before committing themselves.
meantime, prices of basic commodities have skyrocketed and ordinary people are
feeling the pinch as their income has been eroded by rising inflation.
President Robert Mugabe removed from power in November 2017, many people hoped
that his successor, President Mnangagwa, would steer the economy on a growth
promised to open up the political space and the business community was hopeful
that the economic and re-engagement policies he was embarking on would yield
higher dividends for the country.
promised to promote the ease of doing business, with one of the first major
steps being to amend investment laws to allow foreign companies to own higher
shareholding than the previous threshold of 51 percent local and 49 percent
foreign which Mugabe had been running along with.
continued to reel from economic challenges which included low capacity
utilization of below 50 percent in industries.
currency squeeze compounded by local currency shortages made the situation worse
with many productive hours being lost as workers spent time in bank queues.
also spending lots of time in fuel queues as both petrol and diesel remain in
short supply because of the foreign currency constraints.
staple in the country, is also in short supply after the Reserve Bank of
Zimbabwe failed to timeously provide foreign currency to foreign wheat
during the course of the year promised to ease the problems through rebuilding
investor confidence by re-engaging with the West, including the European Union,
the United States and the United Kingdom.
began with Mnangagwa attending the World Economic Forum in Davos, Switzerland.
His presence was widely hailed as a great success as Zimbabwe began sloughing
off the pariah state tag and assuming that of a state under rebirth and full of
promise and opportunities.
a lot of international goodwill was created by the trip, the first by a
Zimbabwean head of state, amid high expectations that the country could return
to its former glory as the “jewel of Africa.”
Zimbabwe political science professor Charity Manyeruke said the immediate
success of the Davos trip had to do with the country’s image in terms of its
willingness to re engage with the international community.
former president of the Zimbabwe National Chamber of Commerce Luckson Zembe said
the president had scored points on a number of issues during the Davos trip.
itself of the president created an opportunity to present the Zimbabwean story
and re-engage with the international community,” he said.
the Davos trip, Mnangagwa said Zimbabwe was once again a respected country and
global investors were genuinely curious about opportunities in the new Zimbabwe.
also early in the year sent his emissary, Foreign Affairs and International
Trade Minister Sibusiso Moyo to the European Union, the United States and to the
United Kingdom and the Commonwealth in his re-engagement efforts.
re-engagement process, however, has been slow.
government appears to have been unfazed by the diplomatic overtures and in July,
on the eve of the country’s tripartite elections, extended sanctions on the
Zimbabwean government pending the fulfillment of a list of reforms, among them
the holding of free and fair elections.
observers to the July 30 elections condemned them as not free and fair and added
that the country had lost an opportunity to enhance the re-engagement process.
Commonwealth and EU observer missions also noted concerns in the conduct of the
was compounded by the deaths of six people on Aug. 1 following demonstrations
intended to push the Zimbabwe Electoral Commission to announce presidential
international commission of inquiry headed by former South African President
Kgalema Motlanthe blamed the police and military for the deaths while at the
same time accusing
opposition party MDC Alliance of instigating the demonstrations which later
Commonwealth wanted to use the conduct of the elections as one of the benchmarks
for Zimbabwe’s possible return to the Commonwealth which it left in 2003 over
governance issues and is yet to pass its verdict on the issue.
Nino-induced drought forecast for the 2018/19 season has dampened the spirits of
Zimbabwean government has assured the people that there are enough grain
reserves, there may be need to offer supplementary food to affected households.
tobacco crop may help ease foreign currency shortages if the rains are kind
enough to allow it to mature. Failure of the crop will have a serious impact on
foreign currency earnings for the country and leave many farmers poorer.
tourism remain potential foreign currency earners, but high demand for the hard
currency by industry and fuel consumers may result in curtailed economic growth.
government will also have to deal with potential labor problems as workers are
demanding higher salaries in view of rising prices of basic commodities,
healthcare, education and shelter.
such as junior doctors in public hospitals, have already demanded payment of
salaries in U.S. dollars despite the fact that the country is not generating
enough foreign currency to sustain government operations, infrastructure
development and provision of social services.
which was at 20.85 percent in October, rose to 31.1 percent in November, a
10-year high since 2009.