Zimbabwe: Africa’s next economic giant

By Bernard Bwoni

There is going to be agitation about this but fact of the matter is that Zimbabwe has been under economic sanctions for over ten years and to date still reeling under the effects of these ruthless economic measures. It is the resilience of the people of Zimbabwe that is inspiring and has held the country together amid the ravages of the disproportionate and illegal actions. The people of Zimbabwe have endured unimaginable distress, poverty and destitution as a result of the economic sanctions imposed without any due care or attention to the plight of the ordinary people. Under the circumstances when you look and analyse how the country has performed when compared to other African countries in terms of economic growth rate then you understand the resolute spirit of the people of Zimbabwe. Zimbabwe adopted the multi-currency regime in 2009 and the economy grew quite significantly with annual growth rates of over 10% in 2012 and eventually and gradually declining to growth rates of below 5%. The significantly high economic growth rates when the country started using the multi-currency needs to be clarified to highlight clearly that the decline to the lower rates of today had nothing to do with government policy but rather the economy readjusting and reconfiguring itself from the high inflationary period of the domestic currency to the US dollar. That is a fact and what we are witnessing in the economy is real growth. In the period 2009-2012 Zimbabwe had no manufacturing capacity to back the over 10.5% economic growth rate that was being touted as Tendai Biti’s economic genius. The growth we currently have in Zimbabwe is real growth from a normal base.

Here are some key statistics about economic growth in some African countries picked randomly and all these countries are not and have not been under economic sanctions for the past 13 years. Kenya had a growth rate of 4.7% in 2013, Lesotho 3.4% in 2013, and Namibia 4.3% in 2013. Zambia had a growth rate of 6.5% in 2013 and Angola had a growth rate of 5.1% in 2013. Botswana had a growth rate of 5.4% in 2013, Uganda 5.2% in 2013 and Mozambique 7% in 2013. Zimbabwe under the full impact of economic sanctions posted a modest growth rate of 4% in 2013. Food for thought.

The economic situation in Zimbabwe is presented as dismal and bleak judging from some news headlines and recent IMF Report on the country’s economy. A recent IMF Report screamed ‘Zimbabwe economy is in a tailspin and at crossroads’. The report is clear that ‘the main objective of the new SMP is to strengthen the country’s external position, as a prerequisite for arrears clearance, resumption of debt service and restored access to external financing’. Zimbabwe met all the targets and structural benchmarks set out by the recently expired IMF Structural Monitoring Programme which expired in June 2014 leading onto the third review which will run until December 2015. The workings of the IMF always leave a lot to be desired. This is a footnote on the IMF website “¹ An SMP is an informal agreement between country authorities and Fund staff to monitor the implementation of the authorities’ economic programme. SMPs do not entail financial assistance or endorsement by the IMF Executive Board”. Yet in the report it states “Key risks to the new programme stem from global commodity price shocks, domestic policy slippages, gaps in policy implementation capacity and lagging progress in resolving external arrears. While Zimbabwe faces these risks with artificially no buffers, the successor SMP aims to rebuild these buffers and strengthen the country’s resilience to shocks”. So the IMF will not restore financial assistance or debt relief but instead will ‘rebuild the buffers’ they destroyed in the first place and strengthen Zimbabwe’s resilience to shocks’? Since Zimbabwe has met all the conditions as set in the previous SMP so why not offer debt relief and a debt clearance strategy? This makes you wonder if the Zimbabwe economy is as bleak as some are making it sound or it is just vultures circling round the prey waiting to swoop and take credit from those who engineered this economic miracle beckoning.

In as much as the situation with economy paints a discouraging picture Zimbabwe is on the doorsteps of a phenomenal economic recovery. The silently impending economic revival is due to country’s policy indigenisation, the land reform and economic empowerment.  Zimbabwe has struggled economically due to sanctions imposed and the fact that the country is still standing is testimony to the resilience and collective strength of the Zimbabwe people. The country is moving towards a new economic reconstruction backed by a resurgent agricultural sector, mining, the enhanced contribution of the Small and Medium Enterprises (SMEs) and the steady rise in foreign direct investment. The Chinese and Russians have been upfront and forthcoming with their investment into Zimbabwe. The EU and the UK have continued with the carrot and stick approach to investment and the removal of sanctions against Zimbabwe, appearing to be rewarding the people of Zimbabwe by removing the economic sanctions against the country painstakingly slowly whilst keeping sanctions against the Head of State, President Mugabe. The Chinese concluded billion dollar projects in Zimbabwe to date and on his recent trade mission to China President Mugabe concluded several infrastructure deals with the Chinese. The Russians recently send their Foreign Minister Mr Sergei Lavrov to Zimbabwe and signed a $3 billion platinum mining deal. The EU have been all talk and placing conditionality after conditionality and the UK on the other hand send a three men trade mission to ‘scoop for business opportunities in Zimbabwe’.

Zimbabwe is currently facing significant challenges economically and to get out of this mire and mud requires the collective spirit of the people of the country. It requires a positive mind-set, positive attitude and that patriotic desire to free the country from this economic burden we find ourselves in. It is just a matter of time before Zimbabwe reclaims her rightful place as the continent’s economic hub.

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