Zimbabwe into 2015: Time not on our side

The signs of a new spring season are now evident everywhere, we have four months to go before the end of the year and a new agricultural season will commence in a few weeks — it’s time to look at the outlook for 2014 and 2015.


At the opening of the year, the Ministry of Finance forecast growth of 6% with 4% inflation. Since then we have seen the country slip into deflation with prices declining by about 1% and ominously the VAT collections by the ministry have declined by about 7% below budget. This reflects lower consumer spending and in other economies this would signal a downturn in the wider economy.

There are a number of indications of economic stress — bank failures, declines in sales of primary consumer goods and reports of company failures. Employment levels continue to decline and formal sector employment may have now fallen to 500 000, half of which is in the civil service.

In his outlook for 2014, Finance minister Patrick Chinamasa highlighted growth in agriculture and mining and some recovery in industry and commerce as well as tourism. The reality is that these growth projections have almost all failed to materialise and I think that there is almost no doubt in my mind that the GDP will decline in 2014 after growth from 2009 to 2013.

The combination of deflation (prices declining) and negative growth in the GDP is creating serious problems for all sectors of the productive sector. The impact is especially severe in industry and commerce and if nothing happens to halt the decline in the near future we can expect bank and company closures to continue. These closures are mostly irreversible and the long-term impact on the wider economy will be severe.

In agriculture, the government points to the rapid rise in tobacco production with sales in 2014 breaching the 200 000-tonne barrier. However 70% of growers failed to pay back their loans and financing in the coming season will decline by about 30% as companies seek to limit their exposure to unsecured debt.

Coupled with further attacks on farms occupied by commercial farmers, this will further influence the forthcoming crop and it is likely that tobacco output will decline in 2015.

Cotton production fell dramatically in 2014, but might rise in 2015 if farmers respond to higher prices in 2014 and financing is available for crop plantings. All other crops are unlikely to see any changes and Zimbabwe will remain an importer of basic grains — maize, wheat and rice.

Imports of soyabeans and other agricultural products including milk and milk-based products will continue at present levels.

Growth in 2015 relies almost completely on halting the decline in industry and commerce and expanding investment and output in mining and tourism. It seems clear to me now that the major investment by Essar in Zisco and associated mining and industrial activities is now unlikely to take place.

The main reason for this is the time taken between the signing of the deal in 2010 and the clearance of all the obstacles in 2014 and the associated downturn in global market prices for steel and iron ore. It may well be related to Essar’s financial problems in many other countries where they operate.

Many new investments in the mining industry are on the books — platinum, gold, nickel and chrome, but the problem of securing the funding for these major investments is proving to be almost insurmountable. Major companies that are already invested and could expand their operations significantly if conditions were right point to continuing threats to the security of their rights and problems with power supplies as being the primary constraints.

In the tourism sector, the reality is that we remain a minnow in the region.

Botswana receives aver 1,2 million foreign tourists a year — six times the number visiting Zimbabwe. The duration of stay remains very low with the principle destination being the Victoria Falls. It is difficult to see any real prospects for significant growth in this sector even though the potential is significant.

So where does that leave us, I have not done any sort of analysis using the weighting of each sector in the GDP, but I simply cannot see any reasons as to why we should expect 2015 to be any better or worse than 2014. If what we are doing is not working, we need to sit down and ask ourselves what we are doing wrong and then put that right without delay.

I would list the following issues as the main issues needing our attention:

Indigenisation — We need to ask ourselves: has this policy stimulated or suppressed investment? I think the answer is self-evident; no other factor has done more damage to our performance as a destination for new investment than this policy. It’s time to scrap the policy and look at other ways to empower our people.

Insecure tenure over assets — The wholesale eviction of white, indigenous Zimbabwean farmers from their farms and homes without compensation, often by force and in defiance of court orders represents one of the most serious violations of tenure rights over property in the history of Africa.

No matter how we dress it up, when coupled with similar violations of rights over mineral claims and even operational mining property, it is taken as representing the state’s disregard for property rights.

These are fundamental to investment and until they are restored and protected, we cannot expect significant investment, especially by our own citizens.
Citizenship and residential rights — Despite the fact that our new constitution gives automatic rights to all who were born here, we continue to deny them their fundamental rights: the right to an ID and a birth certificate, the right to vote and the right to a valid passport. Discrimination is now banned by law yet we continue to discriminate on the basis of colour and tribe.

Rule of law and equality before the law — Our judiciary is compromised, makes judgments on a political basis and is open to influence.

Business and private citizens no longer have any confidence in their ability to secure justice from the courts when their rights are violated or contracts voided.

International recognition — We operate in a globalised world where even the biggest operators, China and the US, must abide by the rules or suffer. As a small marginalised country, Zimbabwe has to have normal diplomatic and economic relations with the rest of the world.

All of these matters need a co-ordinated response and attention. The guide that we should follow is the adage by the late Chinese leader Xiaoping Deng: “Does it catch mice?”

Time is not on our side and we, simply cannot delay these decisions any longer.

Cross is the MDC-T MP for Bulawayo South.

5 thoughts on “Zimbabwe into 2015: Time not on our side”

  1. Wezhira Wezhara says:

    Was the wholesale disenfranchisement of the entire native African population of their land by white colonists not a violation of your so called tenure rights Mr Cross? Or are we Africans supposed to be grateful for being taught how to read and write, being given polo vaccines that resulted in HIV and having tarred roads built through our grazing lands??? I’m surprised people like defied cross still don’t see their inherent hypocrisy makes them similar of not worse to the Mugabes….this guy should be left to give speeches to former white Rhodesians and white conservatives in the uk bcoz they are the nil ones who appreciate his drivel

    1. Museyamwa says:

      Wezhira: Eddie Cross has given his prognosis of what the current challenges facing the country are, and went on to give possible solutions? Now i have to ask, where in your answer is your offered solution or even suggestion to the problems bedevilling the country? If this article was written perhaps by a museyamwa like me would you have reacted the way you did? This, i’m afraid is now part of a “culture” so pervasive in Zimbabwe that we run away from robust debate and dialogue and are so blinded by hatred of one another that we fail to see the bigger picture. This same anger, vitriol and blatant racism which we’ve been force fed by our leaders ( and has even now stuck on most of us ) will never heal the nation. Am i the i=only one who thinks this way?

  2. cypriano says:

    Wezhira we zhara what has Cross done to deserve those racist words you have penned?Eddie is advising the government as an economist and politician!What alternatives do you have besides your rantings?

  3. Batshele! says:

    Polio vaccines cause HIV???What garbage! Where were you when the rest of us were at school?

  4. Charles Frizell says:

    First to Wezhira Wezhara – yes, you should be. You also desperately need to study the real history of the country, which is very different from the version propagated by Zanu-Pf. The problem with people like you is that they have a sense of entitlement, which is wholly false. No person is “entitled” to anything at all other than by working for it. Race and perceived history are irrelevant.

    Even the simplest minds can see that Zanu-Pf is totally ignorant of how national economies work; I ascribe this to their early indoctrination in Socialist/Communist states. Apart from China which has a rational model the rest have either abandoned Socialism/Communism or are desperately poor. Russia for instance is a country I visit that has changed in name only, it is the old USSR but now with lights – lipstick on a frog indeed. What do you have “Made in Russia”?

    The two greatest disasters in our country’s history have been the insane Land Grab and the equally lunatic Indigenisation. In order to facilitate these blatantly illegal and unconstitutional ploys to buy votes the Rule of Law was deliberately destroyed years ago when Gubbay was driven out. It should have been obvious that this was because ZPF had some very evil and illegal intentions, as we all discovered later.

    Nakedly racist frothings from Mugabe forever try and pin the blame for all problems on “The Dreaded Whites” when this is very obviously totally untrue. Many of we White Zimbos got totally tired of being incessantly attacked, not to mention being tapped for bribes.

    Nearly all of us people of all races in exile who would be able to help restore the economy will not return because we know we will immediately be engulfed in a web of corruption and inefficiency, and on top of that will have recourse to Law.

    I am afraid that Zimbabwe has destroyed itself; an entire country that has committed suicide. Trying to blame others is childish and pathetic, but it seems the only thing that country’s so-called “leaders” are able to do. Sanctions? My foot!

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