Zimbabwe, under the new leadership of the Robert Mugabe mentored President, Emmerson Mnangagwa, may take another ten years to marginally reverse the deteriorated economic fortunes that once anchored the Southern African country among the world’s emerging markets.
The economic policy changes that started in the late 1990s, and focusing on land reforms, had a significant negative economic impact to the economy of Zimbabwe to an extent only transformational economic reforms can induce investor confidence and economic growth.
By 2016, unemployment stood at nearly 90 per cent, inflation started to rise in the US dollar denominated currency, poverty levels at 75 percent, budget overspend at over 25 per cent, GDP growth rate barely rising above 4 percent while real incomes dropped by more than 70 percent in the past 18 years. Investor confidence is at its lowest and though there is an indication of endorsement of the new regime by leaders of some leading economies, the inflow of capital into Zimbabwe will take more than change at the top leadership.
Mnangagwa has to get to the heart of the problem that led to this: the 1999 policy reversals that targeted property rights. While combatting corruption appears part of his agenda, it should not be a priority if his focus is to reverse the economic fortunes that have affected the people of Zimbabwe. It is largely about investment, and Zimbabwe has fallen way behind its peers on the Global Competitive Report since 2000.
Analysing the critical indicators that drive foreign direct investment that Zimbabwe desperately needs, the country does not seem to have significant problems with most of them. Zimbabwe has among the best educated people in the region and many of them are willing to go back to their country with minimal assurances of good incomes. In terms of infrastructure, though weak and fragile at the moment, it has offered the resilience in the past two decades. If what Zimbabwe went through was experienced by some of its neighbours with a weak infrastructural base, it would have been a complete disaster, with possibly no country to talk about. Fortunately for Zimbabwe, both physical and financial infrastructure still have signs of life.
Zimbabweans have been investors in technology in neighbouring countries and it will take a measure of political stability for its nationals to relocate back home. The real issue is about governance. Governance has been the main source of the problem and this may explain why Mnangagwa quickly pledged to support the Constitution, which points to the independence of the institutions of governance, particularly the judiciary. This is where Mnangagwa has to signal real change, not cosmetic but real.
From the time three high court judges resigned within a space of four months in 2001 due to political interference, investors began to worry about the strength of institutions to protect their property. This single action promoted what is now termed as the region’s ‘mixed record’, overshadowed among other things, by the controversial land redistribution policy in Zimbabwe. Zambians who are commenting on various platforms that a rejuvenated Zimbabwe may be bad for Zambiain terms of competition for FDI should know that the reverse is true; a positive investment profile for Zimbabwe will be a positive regional profile! It means Mnangagwa has to read and push back to parliament, in the eyes of the global cameras, revisions to Article 16 of the National Constitution. The article protects property rights and fundamental rights of all Zimbabweans, black and white. This action alone is likely to trigger the much-anticipated economic change. FDI inflow will, however, not take place overnight as most investors still want to be in a ‘wait-and-see’ mode, at least for about ten years! They know it is the same regime that led to this but with only some substitution at the top.
By Chibamba Kanyama
The contributor is author of the book, ‘Determinants of Foreign Direct Investment in the Southern African Development Community- Risks and Opportunities’ available on various online distributors.
Why is every Jim and Jack commenting doom on Zimbabwe…The economy of Zimbabwe will start ticking when sanctions are lifted and thats a starting point… all other things are secondary…
Chibamba kanyama,,, theorist all the way! Zambia needs practical people not theorists
@ndobo You call chibamba Kanyama a theorist? are practical yourself? mulekwatako insoni.
Zakeyo, the causes of economic malaise are not sanctions. The whole issue is wrong policies by ZANU PF. a simple example can be ” if a neighbor tell you that he is not going to help you because you call him an imperialist and when you fail to manage your affairs, would blame your neighbour?”
Africans are good at calling the WEST names like imperialist, colonialist and bloody capitalists yet they do not work to be economic independent. Look at Zambia, are we not rushing to IMF for a bailout.
More than 50 years down the line we are busy seeking aid for the western donor.. we either cry for privatisation of the mine or demean local investor.. shame on us, Zambia
I rather do much for my country than wait for dangote, or other foreign investors do it for me…
I believe we can do it…
I don’t The President’s praise or HH but I will do my part quietly. I have done it before and I am doing now. Zambians let us rise above petty issue and make ourselves a great nation. let us think globally and act locally for growth as the starting point. We need long speeches but long hard work
let us not dununa in bars or dance for our leaders at the airport. but let us seriously do bankable investment plans and take risk….. politicians have their interest to serve but we can do better than them.
surely , do you expect Tayali to lead us economically or Bowman? they are so simple guys that you cant consult or do business with them.
Chibamba is a great guy and can be consulted for investment advice.
why not urge Lungu to stop corruption and use the money for development before Zim bounces back powerfully? Mark my words; Zim will bounce back and surprise many;
Mnangagwa knows very well that if he attempts to continue with Mugabe’s policies his exit will be worse than his predecessor.Chiluba and Mwanawasa were from the same party MMD but their styles of governance were totally different
Mwanawasa had actually joined Upnd after resigning as VP. I’ll check my archives to dig for his card number. He didn’t announce the switch publicly.
The President can do better if he stop listening to cadres . The civil service is full of competent officers and their advice is valuable. A true friend is one who tells you in your face that you are wrong ,not praise singers.
The greatest enemy of PF is the cadres within the party. know the will shift when the tide changes.. Who ever thought Dora or Lusambo could be PF today….. this is what I call scarcity mentality ? read Steve Covey book of Seven habits of highly effective people. to know the attitude of people with scarcity mentality.
Chibamba Kanyama wrote this just to advertise his book. That’s smart I applaud him for taking advantage of the situation to point People to his book. Everything he said, is just repetitive of what we already know.
My advice to Zimbos, however, is stay away from IMF. Those evil People will suck your Country and economy dry. You will cry and remember Mugabe.
It’s only a utopian who can believe that the change in leadership means an abracadabra change in Zimbabwe ‘s economy.
I think the controversial land reforms were a necessary evil, otherwise the country would have gone up in flames. It will take God to create some more land to distribute to the indigenous Zimbos, otherwise not even Mnangagwa can reverse it. In Zambia, we still have the luxury of excess land, although at the rate we are going, we will also be in the same situation. The next attraction is RSA, just listen to the rumbles. The best these whites can do is initiate a programme to surrender part the huge chunks of land, otherwise they will loss everything. looking at the economic solutions without considering the political risks is a very serious gamble.
Yes nothing has changed in Zimbabwe and nothing will change. Talk of old wine in new tins.
Disaster!