Zimbabwe is suffering from capital flight, a liquidity crunch, regular power outages, falling commodity prices and other manifestations of an economic crisis.
But beyond these well-documented woes, there are several “mysteries” that throw up searching governance questions for the regime of Robert Mugabe, the 90-year-old president. Continue reading »
The bad old days of hyperinflation
In a week where currency after currency in the emerging markets have been battered, it’s nice to keep your options open. In which case, Zimbabwe seems to have the right idea. Its citizens can now pick any of nine currencies to use.
As of Wednesday, four new currencies are legal tender in the southern African state: the Australian dollar, the Chinese yuan, the Indian rupee and the Japanese yen. Continue reading »
Zimbabwe’s proposed sovereign wealth fund – gazetted in Harare last week – is unlikely to have a material impact on private investment. But, if well-managed, it could do wonders for the country’s bloated public sector. A draft parliamentary bill proposes that a maximum of 25 per cent of mining royalties should be paid into the fund to be managed by the Reserve Bank of Zimbabwe. The SWF will “support fiscal or macroeconomic stabilization” and the achievement of the government’s long-term development objectives. Continue reading »
It’s a 15,000-word document setting out how the government will “prioritise its programmes… and address the country’s socio-economic challenges.” It’s one of the few substantial documents that analysts can get hold of to look for insights into an opaque administration’s intentions.
No, this is not China. It’s Zimbabwe, with this week’s publication of a document titled Zim Asset (Agenda for Sustainable Socio-Economic Transformation). So Robert Mugabe has also set out his stall for Zimbabwe’s next stage. What’s in it? Continue reading »
At least someone is selling
In just under two weeks the Confederation of Zimbabwe Industries (CZI) is due to hold its annual congress. The main focus will be restoring growth at a time when factories and shops are fighting to stay open. Zimbabwe’s industry is still in a perilous state, but following Robert Mugabe’s election victory in July, what can be done? Continue reading »
Investors appear to be getting pretty jittery about placing their money in projects in Zimbabwe, as official foreign direct investment figures from a government agency indicate.
After the country’s recent economic turnaround (post-dollarisation), investors are being turned off by the uncertain political climate, and the small matter of not knowing if they will be stripped of half a business. Continue reading »
On its own, the overwhelming “Yes” vote in Zimbabwe’s referendum on a new constitution means little.
Indeed, it is no more than the first act of a drama that will unfold over the next few months as the country moves towards presidential and parliamentary elections that will determine whether the economy maintains its recovery momentum or slides back into political-driven stagnation. Continue reading »
Ever since the Zimbabwe government published its plans to localise majority ownership of the country’s mines, mixed messages have dominated the debate over investment and growth.
Last week was no different, with the finance minster, Tendai Biti, and miner Amplats making positive noises about investment which seem rather optimistic, to put it mildly. Continue reading »
For years Zimbabwe politicians have been prone to extravagant forecasts of the country’s economic prospects, embellishing projections with references to vast unexploited mineral wealth, limitless agricultural potential and dazzling opportunities in tourism and manufacturing.
But on Thursday Finance Minister Tendai Biti injected a note of stark realism into his 2013 budget. He downgraded GDP growth estimates for 2012 from 9.4 per cent in his budget a year ago and 5.6 per cent in mid-year to just 4.4 per cent. Continue reading »