Let’s brace for a bumpy ride

via Let’s brace for a bumpy ride Editor’s Memo Dumisani Muleya December 20, 2013  Zimbabwe Independent

AS the year 2013 draws to a close, events in Zimbabwe dramatised two competing trends in the country:a botched transition after sustained demands for change by a once-popular democratic movement and the bouncing back of President Robert Mugabe and his Zanu PF party who survived defeat through a mixture of repression with strategic adaptability.

Today’s savvy dictators know how to engineer electoral victory well before election day, especially when dealing with naïve rivals with limited political experience and strategic capabilities.

Mugabe and Zanu PF easily won re-election during the disputed July 31 general elections following systematic manipulation of the voters’ roll, disenfranchisement of voters, vote-buying and possible ballot-rigging.

The MDC-T’s handling of defeat and its panicky scramble to fight the outcome ended in failure.

The party has now been relegated to the periphery of the political landscape it had dominated since 2000. This poses a major challenge for former prime minister and party leader Morgan Tsvangirai on the way forward. The MDC led by Welshman Ncube was virtually decimated.

In a region, that is sub-Saharan Africa, where coups and conflicts overshadow electoral imperatives, Zimbabwe enjoys structure-induced stability although its failed transition, which had started after the bloody 2008 elections and the subsequent inclusive government, poses future political vulnerabilities.

The bigger picture is that sub-Saharan Africa, compared to other areas, has for years ranked as the world’s most politically volatile region, with major democratic breakthroughs in some countries, but coups, civil strife, and authoritarian crackdowns in others like South Sudan and CAR.

However, over the years, things have improved slightly in some countries such as Nigeria, Ghana, Ivory Coast, Senegal, Sierra Leone, Kenya, Malawi and Lesotho. Mozambique is economically booming despite the Renamo threat.

This means Zimbabwe really needs to be more serious in addressing economic issues. With the elections over, despite lingering political uncertainty, government and stakeholders must work even harder in 2014.

Although politics will always impact on the economy, the current relative peace and stability offer an opportunity to at least work on economic issues while the political situation evolves until meaningful change dawns.

Funding is the key issue. Whichever way, government needs a rescue package.

As Finance minister Patrick Chinamasa’s budget statement yesterday shows, Zimbabwe is sliding back economically despite that sub-Saharan Africa’s economies have generally maintained a strong pace in the face of challenges posed by exogenous factors, including somewhat slower growth in emerging markets.

The region’s growth is projected to pick up in 2014, despite the global headwinds that have moderately lowered its performance in 2013.

Strong investment demand continues to support growth in most countries in the Sadc region and output is projected to expand by 6% in 2014, against 5% in 2013.

However, Zimbabwe’s situation is worrying as business confidence remains low and country-risk premium high. The result is a lack of investment and financial inflows required to drive future growth.

Zimbabwe’s persistent current account deficit continues to be a strain on the country’s liquidity as more funds flow out to pay for imports than are generated by exports. The huge import bill has thus been a source of liquidity drain.

Although Chinamasa yesterday proposed to introduce various confidence-building measures needed to move the economy along the trajectory envisaged under the Zimbabwe Agenda for Sustainable Socio-Economic Transformation, which aims to achieve sustainable development and social equity propelled by sustainable exploitation of the country’s abundant human capital and natural resources, besides re-engagement with international financial institutions and other creditors on arrears clearance, debt relief and new financing, the reality is 2014 will be a very difficult year — a slippery slope. So let’s brace for a bumpy ride.