The Sunday Mail
Victoria Rudzidzo
THE impact of the Russia-Ukraine conflict has emphasised the interconnectedness of the globe.
The global economy has staggered over the past year, as a result of the economic fallout of the conflict in Europe.
And predictions are that the slowdown of global economic growth will continue into 2023.
According to International Monetary Fund (IMF) projections, global growth will slow to 2,7 percent in 2023 from the expected 3,2 percent this year.
In 2021 global economy was 6 percent.
The impacts relate to dysfunctional international supply chains, and the resultant elevated prices of goods and services.
But these are largely short-to-medium term impacts.
From a longer-term perspective, the conflict in Eastern Europe is likely to negatively impact on investments in different parts of the world.
Zimbabwe is no exception, especially insofar as the country has long had strong economic ties with Russia.
In recent years, Russia has boosted its investment in Zimbabwe, mainly in the mining and energy sectors, although the numbers are not readily available.
Recently-appointed Zimbabwe Investment and Development Agency (ZIDA) chief executive officer, Mr Tafadzwa Chinamo said they are yet to effectively compute the numbers on investment deals between Zimbabwe and Russia.
“We haven’t yet done any analysis to add value to your inquiry,” said Mr Chinamo.
The imposition of sanctions on Russia could have ripple effects on countries like Zimbabwe, such as a slowdown in the off-take of some projects in the energy and mining sectors.
ZIMBABWE-RUSSIA ECONOMIC TIES
Alrosa – Russia’s leading diamond company accounting for 95 percent of that country’s diamond production and 30 percent of the global diamond extraction by volume – committed to invest millions in a diamond project in Zimbabwe.
Although trade with Russia has been rather low, both countries have been looking to improve trade ties. According to the United Nations COMTRADE database, Zimbabwe’s exports to Russia amounted to US$5,66 million in 2021, while imports from Russia were worth US$54,35 million.
In 2022, the two countries initiated the Fourth Chapter of the Russia-Zimbabwe Intergovernmental Commission on Economic, Trade, Scientific and Technical Cooperation, which is expected to boost investment and trade between them.
Russia has indicated that it is looking to boost investments in the areas of information and communication technology (ICT), agriculture, energy, transport and the pharmaceutical industry.
And as a member of the African Union (AU), Zimbabwe stands to benefit from the Africa-Russia strategic partnership (which was announced at the inaugural Russia-Africa Summit and Economic Forum in Sochi in October 2019) and its potential for cooperation in agriculture, natural resource development, industry, trade, infrastructure, and energy.
RISKS
The sanctions imposed on Russia penalise various entire sectors of its economy.
“The more prolonged the Russia-Ukraine conflict is, the more it will have an impact on our economy. In terms of investment, there is likely to be a slowdown,” said economist Enock Gonye.
“Russia’s foreign affairs Minister Sergey Lavrov has been on tour saying they will continue with their investments, but ultimately a knock will be felt.”
Any long-term economic slowdown in Russia could extend deepen the ripple effects that are already being felt.
The Ministry of Foreign Affairs and International Trade says Zimbabwe has felt the broader impact of the Russia-Ukraine conflict.
“Zimbabwe has not been spared from the adverse effects of the Russia-Ukraine conflict, whose toll on the global economy has been apparent.
“The conflict has affected trade and investment.
“For instance, due to Zimbabwe’s reliance on Ukraine wheat imports, the supply channel was hampered by the conflict,” said the Ministry’s spokesperson, Mr Livit Mugejo.
