The International Monetary Fund (IMF), last week predicted Zimbabwe’s economy would rebound next year and grow 4,2% from a decline of 10,2% forecast for 2020.
This will be a staggering recovery of this battered economy, which has suffered the ravages of mismanagement, plunder and natural disasters, not to mention the debilitating sanctions imposed by the United States and the West.
Corruption has been the millstone around the country’s neck for the better part of the 40 years the country has been under the Zanu PF rule. That the IMF could predict growth of such magnitude in the backdrop of the sanctions speaks to the resilience of the Zimbabwean economy and its ability to weather any storm thrown at it.
IMF’s projections are important in that the Fund had been downbeat on Zimbabwe’s prospects for a long time. Being observers with the ability to predict global economic trends, it is not difficult to believe them this time around. But the level of mismanagement on the ground gives reason for observers to think a quick recovery for now may be over-optimistic.
Yet even as debate over the credibility of the IMF forecasts rages on, the Chamber of Mines of Zimbabwe threw in another set of positive projections on Wednesday, predicting a stronger recovery in 2021 than anticipated. It said gold output would rise by 40% to 35 tonnes in 2021, from a projected 25 tonnes this year.
Growth in ferrochrome output was projected at 92% in the post-Covid-19 era. The chamber projected robust growth in all key minerals including diamonds, which would increase by 67%, with more booms expected in coal and other minerals.
For an economy that has suffered immensely under the Covid-19 lockdowns, and for many years before that through the vagaries not only of the weather but also of a monolithic governmental system, these projections make good reading. But there is an elephant in the room — the politics. Politics have spoiled the party many a time when Zimbabwe has been presented with an opportunity to shine, mostly because of the politicians’ intransigence in the face of sound advice from all over the place including from the IMF itself. But the political elite should not mess up this time around because the fragile economy needs urgent interventions.
Zimbabweans expect the government to behave maturely in 2021 to help the private sector grow, and with it, the entire economy.
The country’s recovery is mainly hinged on the expectation of a US$12 billion dollar mining sector by 2023. But for this to be achieved a lot has to be done. The Industry has complained about the steep royalty rate, which is taxed from gross revenue, instead of profits. This retards the industry’s impetus to continue investing and expanding.
The industry has complained about the costs of labour and inflexibility of the laws that govern it. This must be sorted out without allowing the exploitation of people by capital. It must be a win-win situation. The hassle mining houses have to go through when repatriating their dividends and profits must be expeditiously addressed and the soiled politics need urgent attention to send good signals to the investment community.