ELSEWHERE in this issue, a feature article eloquently tackles what the writer terms “Africa’s Ugly Sisters”, being the Central African Republic, the DRC and Chad — all trouble spots in central Africa.
Editor’s Memo with Stewart Chabwinja
Africa is reputedly the rising continent with most economies growing at above 5%, investors queuing up for business and socio-economic indicators pointing to relative prosperity.
But the destabilising “Ugly Sisters” buck the trend — they are plagued by internecine conflict (exported to neighbouring countries) with isolation, poverty and ignorance “the lot of a majority of the population”.
While Zimbabwe’s economy continues to shrink, its neighbours in the Southern African region continue on a growth trajectory. Even Mozambique, once impoverished by a 15-year civil war, is on a phenomenal recovery path driven by massive coal and gas discoveries and investor-friendly policies.
Is Zimbabwe then the region’s ugly sister? Unlike Chad, the DRC and the Central African Republic, it is not currently plagued by conflict, isolation or ignorance, although it has experienced a socio-economic crisis, sham polls and most of its citizens are wallowing in abject poverty.
Its short-to-medium-term prospects remain gloomy.
There is little hope that the country will pull the majority of its citizens out of the poverty quagmire anytime soon given that the country’s policies, informed by political considerations and expediency, remain a huge barrier to investment.
Current investment policies have seriously compromised the potential of the country’s major sectors, such as mining, to spur economic revival, Australian Ambassador to Zimbabwe Matthew Neuhaus was quoted as saying by our sister publication NewsDay this week.
He said Zimbabwe had failed to provide security of investments due to lack of clarity, adding that policy discord on indigenisation and Bilateral Investment Promotion and Protection Agreements (Bippas) had scared away investors.
“There is no progress on the economic side. In fact, the economy has gone backwards and that is particularly sad,” Neuhaus said.
“You have problems with banks’ liquidity system and you still have major policy debates around issues like indigenisation and land ownership.
“… We have been told that businesses can be seized despite the existence of Bippas. There has to be a change of mindset.”
Same old story! There’s nothing new in Neuhaus concerns: we, as indeed many other Zimbabweans, have been harping on pretty much the same, only to be labelled “alarmists”, “pessimists” or harbouring the regime-change agenda for daring to expose government’s lack of commitment to turn around the economy.
On the much-trumpeted latest economic blueprint, ZimAsset, Neuhaus said: “The government issued ZimAsset, but that is not an economic plan. It lists the things that it wants to achieve, but there are no mechanisms to achieve those things.”
In sync with Neuhaus and local economic commentators and analysts, an IMF report released this week said Zimbabwe’s external position remains precarious with usable international reserves covering less than two weeks of imports.
There is low capitalisation in industry and low liquidity amid political and policy uncertainty long noted as deterrents to investment inflows.
“Zimbabwe faces serious medium-term challenges and achieving sustainable, inclusive growth will require strong macroeconomic and financial policies, an enabling business environment and normalised relations with creditors,” said the IMF in a statement.
Ugly sister or not, Zimbabwe’s prospects do not paint a pretty picture.