Like a phoenix, an economy can always rise from the ashes. All that is required are the right policies and plans in place to ensure that markets are thriving and revving to go.
Zimbabwe has had a tough time in the past couple of years under the hands of former President Robert Mugabe. Now, however, even as the country celebrates the new lease of life that they have now that Mugabe has resigned, it is time to see if those tough times can be reversed.
The country’s economy needs to improve for the people to really feel the effects of this change even as Emmerson Mnangagwa, Mugabe’s former VP, gets ready to take the helm. How will he fare in putting the country on the road to recovery? It is probably one of the chief questions that the President-elect will have to answer and soon.
A quick solution to problems years in the making is probably not feasible but hopes are riding high both within Zimbabwe and in the world at large. Below we present some of the considerations that have already been voiced by experts on a plan to revive Zimbabwe’s economy.
5 Ways To Revive Zimbabwe’s Economy
Ever since the hyperinflation of 2009 which killed the old Zimbabwean dollar, the country has flailing from one currency to another without an actual currency of its own. In the time, the US dollar and the South African rand have been the go-to currency for transactions in Zimbabwe.
Prior to the exit of Mugabe, the cash shortage in the country was strangling Zimbabwe’s economy. Seeing as most people see Mnangagwa as cut from the same cloth as Mugabe, Western donors may still remain wary of just pumping in the needed cash.
The International Fund which has described Zimbabwe’s economy s one of the most fragile in the world may be more agreeable but as always, there will be strings attached to that rescue.
Throwing Out Damaging Policies
President Mugabe in his time implemented some policies that were deemed poisonous to the economy. The policies had been unpalatable to foreign investors and had therefore driven them away. One instance is the fact that Zimbabwe’s agricultural production started to plunge after the government-sanctioned programme of farm seizures came into effect.
Another instance is the 2009 signing of the Indigenisation and Economic Empowerment Act (IEEA) into law. The IEEA looked to transfer 51% of companies to black Zimbabweans.
Mnangagwa will have to be careful in these policy changes, however, considering that they are seen in many areas as one of the few good legacies of Mugabe; his black empowerment agenda.
If the cash injection does come through, Mnangagwa will have to contend seriously with corruption. It has been one of the hindrances to growth in Zimbabwe. The farms which were taken from white farmers, for instance, ended up belonging to army generals and the political elite, who knew next to nothing about farming. This led, of course, to their eventual failure.
Corruption is a big issue in most African countries and is sometimes the simple reason behind the failure of their economies. Unfortunately, Mnangagwa himself has severally been criticized on the grounds of corruption. When he was the defence minister in 2008, the army effectively took over the Marange diamond fields in the east of the country
Create a New Currency
Zimbabwe simply needs to have its own currency again. The country has tried some back channel ways of doing this like introducing “bond notes” which were meant to help the chronic shortage of US dollars in the system.
A currency is, however, created not only by printing money but by the confidence that is placed on what is printed. Several protests were made at the introduction of the bond notes and the demand for US dollars rose even further. The country needs to look to the creation of its own currency in the long term.
Unemployment in Zimbabwe runs as high as 90%. Attracting investors into the country with better policies will help with that but the country also needs to promote its agriculture and mining sectors. The country has one of the most skilled labour forces in Africa and it is about time that they find work in their own country.