Zimbabwe’s economy is recovering fast but its people don’t realise it

The third challenge is to fix agriculture. I think we all know the industry is broken but what we fail to appreciate is what it is going to cost us to get our farmers back to work. Although the record is muddled, progress has been made on the ground. In the past winter season, we could have produced close to 300 000 tonnes of wheat and barley had we had the money to finance our farmers. We grew over 200 000 tonnes and this is double what we did in 2019, but we are struggling to pay for it. Still it shows progress.

In fact, my feeling is that the biggest impediment to the recovery and growth of our economy in 2021 is going to be financial. We have to recognize that in 2001/8 and in 2018/9 very high levels of inflation have substantially wiped out the accumulated financial savings of many generations of Zimbabweans. We are now largely debt free, but have no cash. It costs us Z$6 billion a month to import all our basic foodstuffs, it would cost us ten times that to grow the crop and then double that again to buy the crop and store it for eventual sale and consumption.

We have to recognize that the task of our financial industry is very different in a rapidly growing economy than a contracting economy. All the countries that are experiencing rapid growth today, have been able to do so because they could borrow abroad to finance the expansion. We cannot do so on our own and therefore re-engagement is not just an option, it is essential.

I was reminded this past week by the Minister of Foreign Affairs that on the 1st of January Britain leaves the European Union and Africa goes into a new continental free trade zone. I am afraid I think that Britain is in for a hard Brexit and will suffer the consequences for some years to come. The question is what about Zimbabwe in a continental market of over 1,2 billion people and a GDP approaching US$2 trillion, and growing rapidly.

We must recognize the main lessons from the past 50 years in global business. This is a period of historically unparalleled expansion and in the reduction in the global incidence of absolute poverty. 50 years ago China, South Korea and many others were poorer than Zimbabwe. Today they are all middle to upper income countries and the main driver has been access to global markets for goods and services. The combined borrowings of the Asian Tiger economies including the two biggest economies in the world – Japan and China is equal to two and half times their GDP. By contrast African States, including Zimbabwe are significantly under borrowed.

World markets have grown consistently over the same period by 15 per cent per annum and this has created billions of jobs and raised living standards across the globe. Today global financial markets are awash with liquidity and the main problem confronting the banking industry is what to do with that liquidity – how to find profitable and safe outlets for surplus money. Our problem is the opposite. We are swamped by new opportunities, but cannot fund them.

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