A British-based country risk and research company, Business Monitor International, maintains that elections in Zimbabwe will be held this year and their success will hinge on whether a constitution is adopted prior to the polls or not.
But at the same time the company says in its business forecast report for the second quarter of 2011 “of course, there is no guarantee that elections will take place in 2011”.
“The general populace is broadly against holding polls as the violence and emotion of recent elections are still fresh in the national psyche and Zimbabweans are reluctant to expose themselves to this once again.
“Furthermore, there is a belief among the business community that the country’s nascent economic recovery is still too fragile to withstand the negative investor sentiment that fresh elections would almost certainly bring.”
The Zimbabwe African National Union-Patriotic Front is pushing for elections this year but the constitutional committee which is working on a national referendum which must approve a new constitution as a prelude to the elections says there is no way the referendum can be held before September.
The Movement for Democratic Change insists that elections can only be held when the climate is right and terms of the Global Political Agreement which ushered the current inclusive government had been fully implemented.
The MDC seems to have obtained the backing of the Southern African Development Community which called for an end to violence and said it would only sanction elections if they are going to be free, fair and credible.
Though there has been optimism about economic growth this year buoyed by mining, BMI says Zimbabwe faces some uncertainty this year. It says the uncertainty over the timing of elections combined with mixed policy messages from the inclusive government is weighing on the country’s ability to attract investment.
It says growth forecasts by Finance Minister Tendai Biti might be too optimistic. Though the economy grew by 8.1 percent last year, BMI says, this growth was largely due to increases in output in mining and agriculture which grew by 47 and 34 percent respectively, but “the feed-through to secondary and tertiary industries is still relatively weak”.
“Also constraining economic activity is deficient infrastructure, with power cuts a particular nuisance to the manufacturing sector,” BMI says. “The sector is having a torrid time, also having to deal with stiff competition from cheap imported goods and little access to finance for working and investment capital.”
It also says the financial sector is still operating sub-optimally. The majority of loans from financial institutions are still prohibitively expensive and of too short a duration to be useful for meaningful investment.
Despite the gloomy picture BMI says after a decade of economic contraction, “we believe the Zimbabwean economy will see a decade of robust growth if political stability is maintained”.