How can you have a cash crisis when you don’t have a currency?

Third, Zimbabwe has a functioning equity market. It may be self-serving to suggest this, but we think the positive moves seen recently in Nigeria are because the government is financially savvy and hears investors (equity and direct investors, local and foreign).

By contrast, in Angola with no equity market, we are seeing little progress on reforms.

Like Nigeria, the Zimbabwean government will also hear financial market criticism of policy mistakes, although it may not choose to listen to it.

Fourth, Zimbabwe has been offering currency stability to dollar-based investors, in contrast to the slump in currency value in neighbouring South Africa, or Nigeria or Zambia, to name just a few other equity markets across the continent.

Against these positives, we must point out the following: while GDP “should” be rising 6-7%, GDP growth has not even been keeping pace with 3% population growth.

In 2015 we estimate per capita GDP among the working age population fell by 2%.

In 2016, the IMF expects GDP to rise by 1.4%, roughly in line with our expectations for Nigeria, but half the rate of the working age population increase.

The quality of human capital is far higher than neighbouring Mozambique for example, but much of it has left Zimbabwe.

The stock market is sending a very negative message, with MSCI Zimbabwe halving since 2013 (the broader market includes dual-listed stocks which makes this less useful).

Lastly, while Zimbabwe was offering a liberal currency regime, today that is no longer the case, with controls being imposed in a similar manner to Nigeria.

Zimbabwe – like many countries in Africa – has been hit by the fall in commodity prices. The value of precious metal exports (primarily gold, but also platinum and diamonds) fell from $1.4bn in 2012 (37% of exports) to below $1bn in 2013 and remained there through to 2015 (31% of exports).

El Nino has exacerbated the problem. The IMF says Zimbabwe is experiencing the worst drought since 1991-1992, and it expects agricultural output to fall 10% in 2015-2016.

Zimbabwe appears to have been hit harder than neighbouring Zambia, which took in Zimbabwean farmers after Zimbabwean land reforms, and has reportedly seen an increase in its corn crop this year.

What is interesting, though, is what has not happened in response to the fall in export revenues. We have not seen a 40% fall in prices and wages.

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