Tensions deepen economic crisis

(Last Updated On: January 19, 2023)

PHILLIMON MHLANGA / LIVINGSTONE MARUFU

 

Political tensions have risen across the country ahead of the crunch 2023 harmonised elections amid concerns the hostilities will deepen the country’s economic crisis.

Elections are due in July this year but may come sooner to elect the President, Members of Parliament and councillors but simmering tensions are already visible with business fearing if nothing is done, business will suffer irredeemably.

In the past few weeks, a wave of politically-motivated tensions and ‘arbitrary’ arrests involving opposition MPs have been more evident in Murewa and Harare while a lawyer, Kudzai Kadzere was assaulted by police in Budiriro where he was representing his clients.

Over 20 members of the Citizens Coalition for Change (CCC) were arrested over the weekend in Budiriro.

Research firm Morgan & Co said rising political tensions are likely to deepen the country’s economic crisis as most economic activities will be put on hold with politicians moving to garner votes.

“The stakes are high and politics will have a strong impact on the economic direction of the country.

“As we approach election dates, the big risk is that politics will be at the centre of attention and some damage will be felt in the local economy,” part of Morgan & Co latest report published yesterday reads.

Political scientist, Eldred Masunungure said sustained politically motivated violence adversely impacts on the economy.

“Politically motivated violence, especially if it’s chronic and sustained, has inevitable multiple impacts on society, politics, economy and in external relations.

In the Zimbabwean context, the impacts include the economic ones of deterring investment (especially from foreign investors) precisely because capital, especially foreign capital, is a coward.

“For Zimbabwe, politically motivated electoral violence has disastrous consequences on the re-engagement thrust including in relation to Zimbabwe’s ambition to be readmitted into the Commonwealth. In short, politically motivated violence is highly costly to the country along multiple dimensions. There is absolutely no virtue in this kind of violence and confrontation.”

Other analysts told Business Times that the confrontations are likely to mount after the Zimbabwe Electoral Commission (ZEC) angered legislators across the political divide with its controversial delimitation preliminary report. The report was tabled in Parliament last week. The Parliament’s ad hoc committee has since raised serious concerns over the report.

Legislators are not happy with the report and have given a damning assessment.

The final delimitation report must be published by January 28, 2023.

Captains of industry, economists and political analysts raised the red flag.  They said escalated political confrontations   in the run-up to the elections tend to have a greater impact on the economy.

They encouraged democratic contests.

“Those campaigning for political office must do so in peace and without harm to anyone and Zimbabweans are also urged to conduct themselves peacefully so that the elections are done in a free and fair manner.

“People should be left to exercise their rights as they choose the candidates of their choice and this will help the process to end quickly and allow economic development issues to take place.

“Disputed elections will halt all economic operations as there will be anxiety in the market of what will happen next,” the Confederation of Zimbabwe Industries president Kurai Matsheza told Business Times this week.

Zimbabwe’s ailing economy is battling acute shortages of foreign currency and limited foreign direct investment, among many other problems.

The inflation rate, the economists said will stay stubbornly high as there is likely to be more government spending ahead of elections.

They said the administration is expected to fund populist policies. This means investors could play a wait and see while the job market could deteriorate further.

The Zimbabwe dollar continues to weaken against major currencies.

This week, the local currency was trading at ZWL$732 :US$1  on the formal market from ZWL$705.41:US$1 last week on the foreign currency auction platform. In December the Zimbabwe dollar was trading at ZWL$671.44 : US$1.

On the parallel market, the Zimbabwe dollar was trading  between ZWL$1 100 and ZWL$1 200: US$1 from ZWL$700:US$1 in December.

Economist, Gift Mugano told Business Times: “The current state of affairs where opposition parties are regularly denied the right to carry out their political activities is against the spirit of a free and democratic Zimbabwe and respect of rule of law and abide by constitutionalism.”

He added: “Our 2023 elections must be credible. If we fail this test, any discussion on policy, currency, or international engagement will be a futile exercise.

“We just need to get it right. It is not about just getting a government into office, but it is about electing a people’s government. This is key in giving the necessary impetus of whoever gets into government to build confidence and have people’s trust.

“Once we get it right on elections, then the rest of macroeconomic challenges on production, currency and the general macroeconomic environment follow. So, at this moment, it is a far-fetched goal to talk of a single digit   annual inflation rate by March 2024.”

Former ZANU-PF youth leader, Lewis Matutu  also warned: “As we move towards 2023 elections, let’s understand that whatever preferences we have Zimbabwe comes first therefore peace, love and unity can never be compromised.”

On its Twitter handle, the US Embassy in Zimbabwe also raised concern this week over growing number of reports  of violence and intimidation

“We note with concern the events of January 7 and 14, 2023 that have targeted opposition  members and supporters. As Zimbabwe approaches its 2023 general elections, the US Embassy continues to urge peaceful and inclusive political processes.

‘Violence and intimidation create an environment of fear and division in the run-up to by-elections and 2023 harmonised elections. Zimbabwean voters have the right to participate,” the US Embassy in Zimbabwe said.

 

 

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