The Sunday News
Bongani Ngwenya
I HAVE a dream of my beautiful “worldview” of a new political economy in Zimbabwe that will emerge after tomorrow’s harmonised elections that will be characterised by a sustainable economic growth trajectory.
As I have said in the past, tomorrow’s elections stand between this beautiful worldview and doom. The choice lies on the outcome of the election and how the relevant stakeholders will manage the outcome. That is, those who are in power, those who are aspiring to be in power and those that will be in power after the elections. By the way, I am not a politician, I am a Zimbabwean who wants to see the good side of his country.
We have seen it in the past that Zimbabwe has the potential for growth like any other country when managed well, and a potential for doom when mismanaged. For example the decision taken in 2009 to form a Government of National Unity (GNU) marked the turning point of the country’s economic recovery from the preceding economic meltdown that had culminated in a hyperinflation in 2008.
The four years of the GNU saw the country’s GDP surging from negative growth rate of 17,7 percent in 2008 to a positive growth rate of 11,9 percent in 2011, before dropping to 4,5 percent in 2013 which coincided with another national election which marked the demise of the GNU.
Thereafter the country saw all the gains of the GNU and short-lived positive political economy vanishing as Zimbabwe was sliding back to economic mismanagement, evidenced by the all-time period low GDP growth rate of 0,6 percent in 2016, albeit picking to 2,9 percent in 2017.
On the political front, the replacement of the old political economy towards the end of 2017 by the current administration has brought in some degree of hope for the future. The most notable impact of the change of the Government is the warming up of the international community to Zimbabwe. I want to believe that every sensible Zimbabwean will at least credit the current developments in the country for that.
As a result, these elections are setting the country at the crossroads for full embracement of the country by the international community as a prime destination for investment and sustained prosperity or doom. As I am writing this article, I am positively encouraged by the sentiments by other analysts. For example, the South African firm Emergent Research in their article, “Credible elections will see GDP grow 6,5 percent by year-end”.
The investment research and advisory firm is suggesting that a clear winner and a clean election will see the (GDP) of Zimbabwe growing to 6,5 percent by year-end.
In its “Zimbabwe: A Return to Normalcy”, report released on Monday last week, the investment research and advisory firm suggests that in the event of a clear winner and accepted election, GDP growth is expected to be 6,5 percent in 2018 before jumping to 15 percent in 2019.
The firm attributes this growth to capital formation in the form of mining and infrastructure projects that is anticipated to materialise and stimulate downstream spending and incomes. “Growth will average 12 percent between 2019 and 2023,” the research firm said.
“The case of a disputed election introduces a period of tepid growth starting with 2,5 percent in 2018. Any goodwill earned so far this year will be largely reversed by a contested result.”
Growth is projected to remain below four percent as in the period 2013 and 2016 where the 2013 results were generally disputed by the opposition. Emergent Research firm further suggest that the ensuing growth will then average 9,3 percent in the following four years.
The Emergent Research firm is basing its projection figures on the GDP growth in the GNU that took place between 2009 and 2013 where the GDP bounced back to 12 percent in 2009 from -17,7 percent contraction in 2008.
The South Africa-based firm shares the sentiments that a non-disputed election with a credible winner will see Western governments, development finance institutions and lenders resume lending to Government, companies and projects. This growth is predicated on opportunities they see in the health industry, mining and tourism.
“Sectors that naturally leverage GDP growth and have more runway for growth are preferred. These may be sectors that have not received capital in the past and have shrunk relative to the economic size of the country and would grow if funding is made available”, Emergent Research said.
The research firm singled out some sectors of the economy such as the health industry that has lacked funding for the health infrastructure projects, small and specialist operations in the past and the firm suggested that lack of funding have left the industry ripe for large-scale investment and consolidation.
As a result, the sector has a potential of attracting immediate investment with quick returns after tomorrow’s election depending on the outcome of the election and how the post-election period will be managed, as I have indicated above.
The other sector singled out is that of mining, the South African research firm places Zimbabwe among the top 10 world’s largest producers of gold, platinum, lithium, chrome, nickel and tantalite, making these areas minerals attractive to investors.
Lastly, the research firm gives credit to the improvement in the political environment in the last seven months, that it has seen the increased international tourists’ arrivals in Victoria Falls and other tourist attractions as confirmed by the Hotel Association of Zimbabwe and Zimbabwe Tourism Authority.
The improved political environment has also seen the improvement in tolerance for different political views in the country, contrary to what used to obtain in the past political economy.
In conclusion, a sound warning is that a disputed election result would repel any potential funding and lending by current or future investors and lenders who are watching with a keen interest, the outcome of the elections. The destiny of our country is in our hands.
– Dr Bongani Ngwenya is based at the University of KwaZulu-Natal as a post-doctoral Research Fellow and can be contacted on [email protected]
