Killings shatter business confidence

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BUSINESS in Zimbabwe’s administrative and commercial capital, Harare, was closed as the dispute over the presidential election result, which gave President Emmerson Mnangagwa a hotly-contested victory over his closest rival, main opposition leader Nelson Chamisa, escalated.

Staff Writer

Analysts say elections have an impact on the economy and the market situation changes drastically according to election results. Market returns during an election cycle tend to be lower than years immediately preceding and following an election year.

Harare central business district was largely shut down, with shops, banks and offices closed following Wednesday’s violent protests which resulted in the military killing six opposition activists in cold blood.

Suburban business centres — including Sam Levy — were also mainly closed. The military had reportedly told businesses to shut down, while some commercial entities closed on their own for fear of renewed violent clashes.

Checks showed security forces were all over town and the townships as they tried to keep the explosive situation under control. The situation was tense and volatile.

The military operation damaged business and investor confidence as many before the polls agreed Zimbabwe’s economic future is dependent on the outcome of the elections. While some investors went for first-mover advantage, others remained on the fence and behind waiting for election results.

It was expected that an undisputed election outcome would open a new chapter in Zimbabwe’s current economic history and boost business and investment prospects.

Business and investors were confident, hopeful and somewhat relieved thinking after elections Zimbabwe will not carry the same burden of uncertainty and the unknown.

Zimbabwe remains in a shaky economic position, making it difficult to achieve sustained recovery and growth.

Political legitimacy and policy problems have had a negative impact on the southern African country’s ability to reconfigure its politics and economic trajectory amid a chronic liquidity crunch and cash shortages.

There were two possible outcomes from the election with sharply varying implications. A free and fair election outcome — unreservedly endorsed by the international community — would have resulted in extensive capital inflows, enough to help stabilise, shore up and grow the economy.

A disputed election outcome, grudgingly endorsed by observers, is likely to leave Zimbabwe facing a grim prospect of slow recovery and growth.

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