It’s politics stupid, as most firms predict gloomy 2023
THE silly season is upon us, and a cross section Zimbabweans now know what is in store.
Shadowy organisations affiliated to the ruling Zanu PF are mushrooming daily and the queue to the feeding trough is getting longer.
Desperate citizens resort to joining this gravy train as the effects of Zimbabwe’s floundering economy take a toll.
During past elections, such organisations would use coercion and extortionist tactics to squeeze money off companies ostensibly to fund Zanu PF’s election campaign.
January is traditionally known in Zimbabwe as a month for those ambitious New Year’s resolutions which are often dropped before even reaching the halfway mark. More so, it is known for the belt-tightening measures spurred by excessive festive season spending and fresh financial obligations in the New Year.
2023 is a different year; Zimbabwe is going for elections. Analysts and critics say there are ominous signs that the polls may literally and figuratively cost an arm and leg for the two main political parties in the race to govern the country.
The recent battering of Citizens’ Coalition for Change (CCC) activists in Murewa has had a chilling effect on many voters, particularly in rural areas, which can be too remote for the media or election observer missions to reach.
While political actors and gladiators oil their election machinery hoping to sway voters, business interests have often felt the heat.
Nelson Chamisa, leader of the main opposition CCC, this week told The NewsHawks that his party will accept any election outcome once the polls are held on a level playing field.
“If there is reforms, we are duty bound to accept the results of the election, but if there are no reforms, we are going to go down the same path of contestations after contestations. But, there is one thing we have said, we are going to defeat Zanu PF at home and away,” Chamisa says.
“With and without their willingness. We have said this, and are going to continue to say this. This is why they are so desperate, and they have panicked, and this is why they are resorting to intimidation and terror in the countryside.”
Zanu PF denies any charges of fomenting political violence and says it is confident that it will get a two-thirds majority in Parliament and President Emmerson Mnangagwa will retain his seat.
A new study by the Zimbabwe National Chamber of Commerce (ZNCC) shows that more than half of local firms have painted a gloomy economic outlook of 2023, warning that the situation may deteriorate as the country heads towards the general elections.
Experts say the current macro-economic environment is characterised by high inflation which is attributable to endogenous and exogenous factors.
“In terms of business confidence or the respondents’ perception of the current situation (2022) compared to the previous year (2021) and their expectation of the subsequent year (2023); 77% considered the general domestic economic situation in 2022 to have deteriorated compared to 2021 while 15% of stakeholders viewed the 2022 situation as improved. The access to credit situation is considered to have deteriorated by about 81% of the respondents, while 9% indicated that the situation has remained unchanged,” says the ZNCC in the 2022 State of Industry and Commerce survey.
“A similar analysis was viewed for the 2023 expectations, with 59% expecting the general economic situation to be worse, while 18% expect it to improve. In the same vein, 61% and 53% expect profitability and ease of doing business in 2023 to deteriorate compared to 17% and 11% who are optimistic as they consider the situation to improve.
“The business confidence index reflected by firms and business community is generally negative for the upcoming year 2023. The combined diffusion index of BCI (business confidence index) of the industry and commerce decreased to minus 42 from a figure of eight which was recorded in 2021. In fact, the general pessimism shown by the business confidence indicators reflect that stakeholders in industry and commerce’ have no confidence on the government’s macroeconomic stabilisation policies in the coming year 2023, and on the international and domestic economic recovery.”
For many, 2022 was an annus horribilis (horrible year) despite recording a modest economic recovery from the Covid years. During the same year, the World Bank ranked Zimbabwe as the country with highest levels of food inflation at 321%.
The official exchange rate depreciated 530% during the year, from US$1:ZW$108.666 to ZW$684.3339. On the alternative market, the local currency depreciated 367% from US$1:ZW$210 to ZW$980 during the year.
Government projected economic growth of 4% in 2022, a downward revision from initial 4.6% projection. Government’s growth projection was above the IMF and World Bank projections of 3% and 3.4%, respectively.
Experts say while the country still faces growth-restricting factors such as high cost of borrowing, liquidity constraints, policy missteps and perennial power shortages, positive developments in the mining and tourism sectors mean a positive outturn remains a possibility. Morgan & Co, a local brokerage and research firm, says Zimbabwe’s political risk before and after the general elections slated for later this year will derail the relative economic stability achieved during the last quarter of 2022.
The southern African nation has a history of disputed election outcomes, which have often triggered spates of political violence in most urban centres.
“An analysis of past events in Zimbabwe indicates that it is very likely to experience some level of political violence in 2023,” Morgan & Co said in its latest research note titled Zimbabwe Economic Outlook 2023 — Battle Of The Two Lions.
“Campaigning for 2023 is in full swing . . . The main political parties for the 2023 presidential elections are the Zimbabwe African National Union-Patriotic Front and the Citizens’ Coalition for Change. It is Chamisa vs President Mnangagwa.”