Renewed hope for economy, as early signs of recovery show up

Bulawayo — Zimbabwe, once a model economy for Africa, is slowly emerging from an economic downturn that reduced Southern Africa's breadbasket to a basket case.

With inflation of over two million percent and a worthless currency, Zimbabwe was on the verge of achieving the description of a failed state. 

In a decade long depression, sparked by President Robert Mugabe’s seizure of white-owned farms, the rule of law was trampled with impunity. Mugabe refused to accept blame for ruining a once thriving economy, instead blaming sanctions imposed by the West on his government.

A bitter and often tragic power struggle ensued with the opposition Movement for Democratic Change (MDC) and its supporters feeling the full wrath of government sponsored violence.

The signing of a Global Political Agreement (GPA) last September paved way to end the bitter feuding between the two splinter MDC groups and ZANU-PF.

However, against expectations, a long drawn out fight for the allocation of ministerial posts saw hopes of an end to the political and economic crisis, fizzle.

Protracted negotiations finally saw Morgan Tsvangirai’s MDC reluctantly join the inclusive government, despite scepticism about the deal.

Analysts argued that the arrangement would not work as Mugabe could not be trusted to stick to his promises.

Despite some false starts, which saw Deputy Agriculture Minister-designate, Roy Bennet arrested, the unity government seems to be paying dividends.

The manufacturing sector has started to produce, even though not at full scale, with some locally produced goods surfacing in the shops.

Recently, the Australian government moved towards lifting sanctions against the Zimbabwe government saying it would provide financial aid to the troubled nation.

The presence of Prime Minister Tsvangirai has warmed the hearts of the West, often the target of Mugabe’s vitriolic temper.

Australia’s foreign affairs minister, Stephen Smith, said his country would provide Zimbabwe with US$10million to ‘help Prime Minister Tsvangirai and the so-called inclusive government’ relieve the suffering of the people.

Zimbabwe has already adopted the use of multi-foreign currencies which has helped stabilise prices.

In some instances, commodities are now cheaper in Zimbabwe than in Botswana which explains the marked decrease of Zimbabweans flocking to Francistown for shopping.

For example, a 2litre bottle of cooking oil costs R25 or P20 in Zimbabwe, which is cheaper compared to the Botswana price (which is about P35).

Fuel, which saw Zimbabweans flock to Botswana in droves is available at nine Rand a litre. Although it is slightly expensive, Zimbabweans prefer to buy at home rather than to drive across the border.

Civil servants have been the immediate beneficiaries of the new administration. When Tsvangirai took office, he announced that all government workers would be paid in foreign currency, giving soldiers and teachers US$100 in allowances.

This is in sharp contrast to the meagre US$5 or about P40 which most teachers were earning prior to the formation of the new government.

In fact, professionals were leaving in droves, draining the country of its best brains.

The education and health sectors were in near collapse, but thanks to the new administration, schools have re-opened and some health facilities have been re-stocked.

Workers in the private sector earn as much as R10,000 which was unheard of in the Mugabe era.

Tsvangirai admits that the road ahead would be tough but he remains determined to path a heavily battered economy.

Central bank governor, Gideon Gono, and finance Minister, Tendai Biti, have already clashed, but their cooperation will be essential to resuscitate the economy.

The mood among Zimbabweans is upbeat and despite last week’s car crash which claimed the life of Tsvangirai’s wife, Susan, the unity deal remains unthreatened.

Mugabe’s address to mourners and Tsvangirai’s statement that the accident was purely ‘an accident’ eased the nerves of an edgy nation.

Analysts predict that by December, Zimbabwe’s economy should be up and running.

Already investors are waiting in the wings to move in once they see that the unity government is working.