HomeLocal NewsCovid-19, economic crisis douse festive cheer

Covid-19, economic crisis douse festive cheer

FIDELITY MHLANGA

Zimbabweans across all the economic divide who were used to partying all night, pop firecrackers, skidding vehicles while beating drums to signal a crossover to the New Year are today wearing sad faces after police warned against such merrymaking to combat the spread of Covid-19.

With authorities being watchful and putting in place precautions to curb the spreading of the coronavirus, cautious business leaders in Zimbabwe highlighted that Zimbabwe was not yet out of economic doldrums expressing mixed feelings about the country’s economic prospects for 2021.

Confederation of Zimbabwe Industry vice national president Joseph Gunda highlighted the need for continuous supply of foreign currency to industry to ensure smooth operation of the sector.

In June the Reserve Bank of Zimbabwe replaced the interbank market with weekly foreign exchange auctions to determine the Zimbabwe dollar exchange rate to enhance transparency and efficient distribution of foreign exchange.

“There was stability in the auction system and we wish that to continue. We hope that it is maintained. We also urge the central bank to allocate the forex efficiently. Sometimes as industry we see that we are allocated forex today and in the following weeks, you are not allocated any. We want continuity of allocation so as to allow smooth importation of raw materials,” Gunda said.

Gunda expressed concern over the unavailability and cost of utilities key in powering industrial growth.

“As for the Bulawayo industry, you notice that there has been the problem of utilities like water. We would want water to be always available. There has seen a noticeable improvement on power supply and we wish that to continue. Each time utilities go up there is a problem of prices going up and the end users will feel the heat. We also want to encourage continuous engagement between government and the private sector,” he said.

Economist Victor Bhoroma sees a 2021 marked by a general market stability punctuated by increased re-dollarisation and low inflation levels.

“2021 promises to be better for the local economy with increased usage of the US dollar for local transactions which brings in market stability, low levels of inflation, confidence in the banking sector, above normal rains for better yields and electricity generation and market driven price discovery in most sectors of the economy,” said Bhoroma.

“Overall, the economy will grow by between 2%-3,5%.

Most economic sectors (Mining, Agriculture, Manufacturing, Tourism, Services, Real Estate and Construction) will register positive growth spurred by currency stability.”

After the economy declined by 4,1% this year, Treasury expects it to grow by 7,4% in 2021,
Institute of Chartered Accountants of Zimbabwe Chief Executive Officer Gloria Zvaravanhu conceded that 2020 was a difficult year punctuated by runaway inflation forcing the accounting profession to continue using hyperinflation reporting.

“2020 was a tough year on many fronts but it is said let your hopes, not your hurts shape the future. In that spirit my aspirations for 2021 are positive,” said Zvaravanhu.

Zvaravanhu’s comments come after the country’s runaway inflation forced accountants to adopt a hyperinflation reporting model during the last quarter of 2019.
Zimbabwe’s inflation reached a post-dollarisation high of 838% in July 2020.

Although it has since reduced to just above 400%, it still remains the one of the highest in the world.

Hospitality Association of Zimbabwe president Clive Chinwada expressed mixed feelings about next year, especially looking at it from the point of view of the tourism and hospitality sector.

“The fact that there is a new strain/variant of Covid-19 means that the nightmare caused by the pandemic is far from over. Whilst there is positive news in relation to the availability of vaccines, it is still unknown what this implies in relation to the new strain,” Chinwada said.

He highlighted that as in tourism and hospitality, there is room to work on and improve perceptions around the national brand at a time there is a lot that has happened generating negative international headlines to the detriment of the national brand and tourism sector.

Zimbabwe Commercial Farmers Union president Shadreck Makombe said predictions of better rains this season cast hope for the year.

“What’s needed is to synchronise policies, as well as visions of different businesses. We cannot say everything is going to be identical but we are saying the focus should be in sync with what’s happening in the business environment as a whole.

Notwithstanding natural disasters it appears it’s going to be a good year,” Makombe said.

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