The recent 2018 Zimbabwe elections are likely to put further pressure on the economic crisis, especially due to the brutal crackdown on the opposition and the controversial Constitutional court judgement on the elections. More so, despite President Emmerson Mnangagwa being officially declared as the presidential winner with a razor thin margin, the economy has shown no signs of improvement.
By Ophias Kurauone
The 2018 Zimbabwe election was one of the most disputed elections in the history of Zimbabwean politics which spilled into the Constitutional Court for determination after allegations of ballot fraud and massive rigging in favour of President Mnangagwa.
The post-election period has been characterized by political violence, state sponsored abduction of opposition activists and harassing of innocent civilians by state security agents. This has widely been condemned by the key economic power houses such as the US, European Union, Canada, Sweden, United Kingdom and others.
The country has lost credibility with the international community and it will likely remain in isolation until major reforms are implemented. For example, the USA had already renewed the Zimbabwe Development Economic Recovery Act bill (ZIDERA). It means that, the new President, top Government officials and state firms will not be able to carry out business with the United States. This has dampened hope for the country’s economic revival.
The current Economic situation
Official economic growth in 2017 was pegged at 2.6% and was said to have been driven by command Agriculture and the minerals sector. However, most independent economists are projecting slow economic growth of an average of 1.2% per annum for the next 5 years.
The country is currently facing chronic liquidity challenges which is a manifestation of high import bills, fiscal indiscipline, structural deficiencies, lack of confidence in the banking sector, speculative dealings and distortions in the economy.
The unemployment rate which is currently pegged at more than 90% continues to skyrocket as the country’s industrial capacity utilization continues to decline. It is the hope of every Zimbabwean that the Mnangagwa Administration will quickly find solutions to the challenges that the nation is facing.
The respect for human rights can provide both direct and indirect mechanism for encouraging Foreign Direct Investment and install confidence in the economy. Empirical research indicates that countries with a conducive business environment and less repressive laws such as Mozambique, Botswana, Zambia and South Africa attract more investment.
Citizens who do not fear their Government are more than willing to contribute their time, resources, skills and more importantly ideas – towards the economic good of the nation. It is worthwhile for the Mnangagwa Administration to create a conducive environment for the citizens to freely exercise their democratic rights and for businesses to prosper.
Furthermore, it must be noted that a stable supply of labour and/or raw materials at a lower cost makes a country attractive to resource-seeking foreign investors. But most economists have argued that, foreign investors want to avoid corrupt countries because the benefit from a supply of resources at a reduced cost can be undermined by corruption because additional costs are required to meet the demands of corrupt behaviour.
At the end of the day, it is key for the Mnangagwa Administration to implement an impartial fight against corruption so that it gains confidence of the nation and investors which will in turn spur economic growth. Therefore, an impartial crackdown on corruption and looting in Zimbabwe will lower business costs and attract Foreign Direct Investment.
Ophias Kurauone is an academic, a Scientific researcher in Management Science and Engineering. Copyright ©www.thesolutionstower.com , 2018 All Rights Reserved. The Solutions Tower Article may not be published or reproduced in any form without prior written permission