Opinion

Look inside the crystal ball, Mr. President

Government yesterday announced that President Emmerson Mnangagwa had started his three week annual vacation. After going through a turbulent 2019, Mnangagwa saw it fit to be on sabbatical in the New Year.

Unlike his predecessor, the late Robert Mugabe, he chose to enjoy this break in Zimbabwe. His deputies Constantino Chiwenga and Kembo Mohadi will take turns to act in his place.

As Mnangagwa takes his annual leave we can only hope that he looks into the crystal ball to see what lies ahead of a nation that has such enormous potential but continues to take baby steps 40 years after Independence.

Just last week, the president came face to face with what many Zimbabweans are expecting from government—bread and butter issues not a space trip. A bleak outlook characterised by growing expectations to resolve the political impasse, a weakening currency, power and foreign currency shortages.

Last month, a UN agency said Zimbabwe is facing its worst hunger crisis in a decade with half of the population requiring emergency food aid. Already business leaders have warned that the economy is expected to deteriorate further in the next 12 months as the country’s woes escalate on the back of continuous skyrocketing of prices of goods and services, low domestic demand, coupled with low production.

In his 2020 National Budget, Finance minister Mthuli Ncube projected the economy to grow by 3% this year from a negative growth of 6.5% in 2019 buoyed by agriculture. Not many agree with the Oxford University trained economics professor. The number of school dropouts is expected to rise this year on the back of unaffordable school fees and uniforms. State-owned universities have also proposed 10 fold increases this year.

One can only imagine the socio-economic impact resulting from this. Foreign currency crunch is also hammering industries, while hyperinflation, recession and a record unemployment continue to dog the economy, a situation which has left companies under stress.

Last year, the economy was characterised by predominately relatively tight fiscal measures with cash shortages, liquidity challenges, capacity utilisation and crippling power outages. Zimbabwe, since May last year, endured the worst power cuts in three years.

Companies are reeling from rolling power blackouts, with companies losing significant amounts of dollars due to power cuts alone. Companies are also battling increased cost pressures, varying from direct economic costs, indirect costs, and social costs. Indirect and social costs are equally important components when considering the impact of power interruptions.

The other risk is that many companies are debt-ridden and are failing to pay their obligations because interests on debts are accruing additional charges, pilling pressures on already struggling companies.

The economy is also battling curtailed net capital flows, declining investor confidence, rising unemployment, rising prices and dented sentiments. The World Bank warned in the absence of international support, Zimbabwe macroeconomic challenges may persist.

As you enjoy your day in the sun Mr. President, be mindful of the enormous work load that awaits you when you return and possibly leave for the Davos World Economic Forum meetings

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