Tuesday, 14 August 2018

Zimbabwe Economy Burns As Chamisa, Mnangagwa Fight!

It is a crying shame that Zimbabwe's political stalemate, in the wake of the hotly-disputed July 30 presidential poll, has pushed the urgent need for the country to fix its ailing economy on the back-burner — as price hikes and severe shortages of cash, foreign currency and fuel continue to bite.


At the same time, business leaders and economists have warned that the dispute — in which opposition leader Nelson Chamisa is challenging President-elect Emmerson Mnangagwa's razor-thin victory — is likely to further weaken the country's economy.

This comes as millers have also warned of looming price jumps on bread and other bakers' confectioneries, as they struggle to import wheat due to the country's worsening foreign currency crisis, as well as rising international input costs.

And to add to the misery of Zimbabweans, the country continues to experience severe cash shortages, as well as erratic supplies of petrol and diesel at most garages — amid conflicting statements from authorities.
Zimbabwe Economy Burns As Chamisa, Mnangagwa Fight!
The president of the Confederation of Zimbabwe Retailers (CZR), Denford Mutashu, told the Daily News yesterday that the political stalemate was not good for the country, and was affecting business badly.

"Its impact is to create a debilitating wait and see mode within the business sector ... the parallel foreigners exchange rates are also on the rampage again, climbing back to 185 percent from 155 percent to the US dollar just before and during voting day.

"Business' expectation is that the courts will bring the stalemate to finality soon, so that the country can move forward in unity and tranquillity," he said.

Economist Eddie Cross said there was no doubt that the economy would continue to burn until the presidential poll dispute was resolved.

"Business never likes uncertainty and until the position of the president is resolved, we will see reduced business activity across all sectors," he warned.
Another economist John Robertson also said the long time that it was taking to inaugurate a new president was affecting business, warning that the recent ugly protests, as well as the clampdown on opposition kingpins by authorities would negatively affect Zimbabwe's prospects of attracting badly-needed investment.

"The more serious problem is that many have been waiting for this election before making any investment decisions, and the outcome so far will discourage many from making those decisions.

"Some may even abandon the whole idea of investing here altogether. So, I think the unrest ... may cost the country millions of dollars that may now not come in, or may take a little longer to come in.

"The exchange rate will also probably continue to soar and in any case, that was not going to come right until significant investment had come into the country," Robertson told the Daily News.

Millions of Zimbabweans cast their vote in the historic July 30 elections, to choose both a new Parliament and president — following the dramatic fall from power of ousted former leader Robert Mugabe in November last year.

The elections were the first since 1980 to be held in the country without Mugabe's participation, whose 37-year iron-fisted rule was stunningly ended by a military operation which triggered events that ended with his resignation.

The elections also marked the first time that the main opposition MDC was not represented by its founding leader Morgan Tsvangirai, who lost his brave battle with cancer of the colon on Valentine's Day this year.

Zanu-PF retained its two thirds parliamentary majority in the elections, with Mnangagwa winning a tightly contested race by 50,8 percentage points.

However, Chamisa has challenged Mnangagwa's victory at the Constitutional Court (Con-Court), delaying the inauguration of Zimbabwe's new leader.

In determining the petition or application, the Con-Court may declare a winner or invalidate the election — in which case a fresh election will have to be held within 60 days after the determination.

It is against this background that business leaders fear the struggling economy will further weaken, as black market rates for the coveted United States dollars continue to push the prices of basic commodities upwards.

The Grain Millers Association of Zimbabwe (Gmaz) recently warned of an increase in the cost of bread, due to the rising price of imported wheat.

In a statement, Gmaz said it had been advised by its international suppliers that wheat import prices had gone up due to transport and shipment costs that had skyrocketed.

"The prices have increased by between $30 and $35 per metric tonne, meaning that you now need to pay $405 per metric tonne, from $370," it said.

The July 30 national harmonised were seen as a litmus test for Mnangagwa and his government, as their conduct was seen as determining whether the country would qualify for international bailouts and new investment.

Political analysts have said the violence and clampdown of opposition leaders might have already done a lot of harm to Mnangagwa's quest to mend years of frosty relations with Western governments.

They said until the post-poll anarchy, Mnangagwa had done enough to project himself and his administration as different from Mugabe — who was accused of running Zimbabwe into the ground.

However, the peaceful campaigns and a friendly spirit that had characterised the run-up to the elections were marred in the aftermath of the elections when deadly violence broke out in Harare's central business district (CBD), following a clash between opposition supporters and security agents.

At least six people subsequently died when the army, which had apparently been called in to assist in managing the situation, used live ammunition to break the ugly protests.

Source - DailyNews
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