Business leaders upbeat about Zimbabwe recovery

Business leaders upbeat about Zimbabwe recovery

The good rains have also topped up Lake Kariba, the nation’s biggest reservoir, which has double the amount of water it did a year ago, data from the Zambezi River Authority show. That could help increase output from the country’s main hydropower plant and mitigate electricity shortages that have plagued the country for years.

Despite the optimism, a real turnaround in Zimbabwe could take years, if not decades, given the depths to which it has sunk.

The road and rail system has largely collapsed, taps have run dry in major cities and the health system is barely functional. The pandemic has compounded the nation’s woes, with hospitals overwhelmed by an influx of patients during a second wave of infections last month.

The Zimbabwe dollar now trades at 84 to the US dollar after being pegged at parity just two years ago.

Many goods and services including fuel are priced in US dollars or greenback equivalents, placing them out of the reach of most Zimbabweans who earn local currency.

Teachers and senior doctors, who were paid a minimum of $500 three years ago, now earn the equivalent of $200. The incomes of most workers has also shrunk.

Still, Lloyd Mlotshwa, head of research at Harare-based brokerage firm IH Securities, credits Ncube with driving through several bold decisions, including scrapping unsustainable subsidies and devaluing the local currency, that have helped address deep structural issues in the economy.

“Government accounts have become more transparent and ultimately we are seeing an improved fiscal position, lower inflation and a stable trade balance,” he said.

“Whilst we can debate whether these measures are sustainable or whether they have been implemented deeply enough or correctly enough, I ultimately believe that he has at the very least created forward movement.”-Bloomberg



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