Many economic commentators, without political affiliations, and interest in politics other than regard to the socio-economic impacts of political developments have frequently voiced concerns over the negative consequences of the prevailing Zimbabwean economic environment.
Column by Eric Bloch
They welcomed the creation of the Government of National Unity (GNU) thinking that it would trigger a more stable, and less confrontational political environment.
Recognising that the primary cause of the deteriorating economic environment that had characterised Zimbabwe since 1997 had largely been politics, with consequential intense poverty and hardships, they welcomed the GNU as a potential trigger to comprehensive and much-needed economic recovery.
First and foremost the source of anticipation of meaningful economic recovery was the agreement between political parties for the formation of the GNU which they thought would include major political and economic reforms.
And, when the GNU came into being, some of those anticipations proved to be well-founded, for in contrast to the economy continuing to decline as it has been for a decade, it finally recorded some upturn, and hyperinflation was halted. Although deflation was not realised, and therefore the cost of living for Zimbabwe’s residents continued to be high, inflation become the lowest prevailing anywhere on the African continent.
The much needed Foreign Direct Investment (FDI) began to flow into the economy to a fairly considerable extent, especially so in respect to the mining sector, resulting in significant employment creation, enhanced export earnings, and other diverse economic benefits.
Instead of the economy continuing to decline year-on-year, some growth was achieved, as evidenced by the slight increases in the Gross Domestic Product.
Tragically, however, the apparent political unity and resultant economic benefits proved to be shortlived. Progressively the political divide became more pronounced as tensions resurged due almost entirely to the resistance of the president and many in his party’s hierarchy to implement reforms prescribed in the Global Political Agreement (GPA), with only some of the agreed issues being adopted.
Restructuring of the state’s security sector to preclude political interference, introduction of reforms on the media, and other agreed issues were not pursued, and with increasing intensity the GNU became divided and dysfunctional.
Among the many adverse consequences of the intensifying disunity, a major one was the collapse of investor confidence which had generated meaningful FDI and associated economic benefits. As a result, FDI has progressively declined over the last two years, especially so in the current year, hindering economic recovery.
International lines of credit to commerce and industry and loan fundings to the money market have almost dried up. Morale of the economically oppressed populace has plunged, innumerable industrial, commercial and other economic enterprises have collapsed or considerably downsized, while unemployment has increased and more Zimbabweans are confronted with hardships and poverty.
There were however hopes Zimbabwe would conduct credible elections to ensure progress.
However, despite the demands that elections be held, it is necessary to have transparent voter registration process, good administration and conduct of the elections , and accurate results.
With all this in mind, there was widespread dismay when the Constitutional Court (Concourt) determined that elections be held not later than July 31, a date a month later than the president had wished the polls to be held.
But it was widely considered impossible to have proper completion of voter registration, production and inspection of voters’ rolls, nomination of candidates and other preparations within seven weeks.
Moreover, two of the Constitutional Court’s nine judges, many advocates and other legal experts were convinced that the majority of the court’s judges misdirected themselves in their ruling, plunging the country into a new crisis.
The almost endless saga between the parties to the GNU, with pronounced wrangling and associated threats, and the rigid resistance of the president and his party to address the outstanding issues of the GPA has proved to be an immense impediment to economic recovery which had marginally improved during the four years of the GNU.
The confidence of potential FDI sources which had developed since the GNU came into being has now almost dissipated, with inflows being exceptionally minimal.
Concurrently, the money market continues to be greatly illiquid, with very little funding available to meet the needs for working capital and other important needs.
Given all this, free and fair elections must be held soon to create a stable and peaceful environment for economic recovery.
If this political stalemate with recurrent disregard for democracy, freedom of voters, and vituperative interactions between the political parties continues, then the barriers to economic recovery erected in 2013 will not be breached, and instead the economy will be on renewed decline, and national destitution will persist.