Zimbabwe: From being hopeful to bullish

For the past decade, Zimbabweans have endured a lot economically.

They have had to carry loads of bearer cheques into shops with empty shelves.

The unemployed have turned to illegal street vending.

And now, with shop shelves fully packed with all manner of basic goods and luxuries, a cash crunch continues to bite those who have failed to accept plastic money.

The diehard cash aficionados insist that they would rather buy tomatoes and bread in hard currency.

Yet, while making this demand, they are not prepared to accept that things could actually ever get better for Zimbabwe as far as employment creation and the cash situation is concerned.

That is the effect of a decade-long fiscal trauma. It takes away all the trust and confidence.

But it is critical for Zimbabweans to appreciate the fact that Zimbabwe is not doomed.

When things hit rock bottom, they can only get better.

The country is endowed with an abundance of natural resources, a good climate and the most skilled workforce in Africa.

With the right fundamentals that are falling into place, Zimbabwe will find itself sooner rather than later.

President Mnangagwa is making headway in creating the right environment for development and it is only a matter of time before we see dramatic effects on unemployment.

His administration has already relaxed an indigenisation policy that was unpalatable for foreign investors.

The icing on the cake are the great relationships that are being built by Government and the international community.

Government is taking every opportunity it gets on the regional and international platforms to reach out to other countries.

As a result, the international community is warning up to Zimbabwe.

This is crucial because Zimbabwe needs to dig itself out of the isolation hole that it had dug itself into over the past few decades.

This is crucial for Zimbabwe’s redemption.

That re-engagement has already set Zimbabwe on its way to recovery with more than 20 billion worth of investments having been committed in the last six months.

Of course pessimists have chosen to deny opening their eyes to the possibility of how such developments could rejuvenate Zimbabwe’s economy.

The economic situation in the country is well on its way to stability.

However, it must be noted that it took years for Zimbabwe’s economy to get to where it is today. It will take some time to repair it and even longer for everyone to see the positive developments.

That, however, doesn’t mean that nothing is happening.

In the meantime, Government needs to tread with caution as it builds the much-needed trust and confidence.

These two ingredients can make or break an economy.

Of late, several companies have woken up from their deep slumber. The Cotton Company of Zimbabwe (Cottco) ginnery in Gokwe recently resumed operations.

The de-watering exercise at Shabanie Mashaba Mines is well underway as the asbestos mining giant prepares to resume operations.

Many more companies have been setting up shop in the country. Think of Pepsi.

The message has been too good to ring true to most Zimbabwe, but that is the reality on the ground.

People are being employed at these companies.

Recent statistics collated from Government have shown that tens of thousands of jobs have already been created in the past few months.

And the rising demand for hard currency is a clear sign of recovering industries; that things are getting better.

An expanding economy requires more foreign currency to buy raw materials; it needs more fuel, which is why queues have been growing at some service stations.

Last year, monetary authorities were importing between $40 million and $50 million every month.

Elsewhere in this paper we report that the Reserve Bank of Zimbabwe has since doubled cash imports to $100 million per month.

The only problem we still face is that the rate at which the economy is expanding is faster than the rate at which we are getting foreign currency due to the trade deficit haunting the economy.

Only an increase in production will eradicate this problem.

This should be our new headache.

While some are still buried in the past, many have moved from being hopeful to being bullish about the future of Zimbabwe.

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