The worst yet to come for Zimbabwe

WHEN man-made disasters correlate with natural phenomena, there can only be one outcome: total collapse of whatever is in question.

mugabe

Such is the case for the Zimbabwean economy, where the man-made policies spearheaded by President Robert Mugabe are positively correlated to what nature has bestowed on the southern African country. This year there is going to be drought in Zimbabwe, and this at a time when government does not have a budget to import maize.

That Mugabe’s policies have been largely disastrous cannot be disputed by anyone in the know. You only have to look at the potential the country has and compare it to what it has achieved, to see how far the current government has taken the country downhill.

Examples of economic decline abound. There is talk of the collapsed manufacturing sector now operating at a capacity utilisation level of about 36%. The unemployment rate is as high as 95%. At least nine banks have closed since 2011, two of them this year.

Two more banks, Interfin and Tetrad, are as good as closed as they are no longer allowed to take deposits and give loans. According to the Zimbabwe Banks and Allied Workers Union, more than 1 000 jobs have been lost.

It is really sad that as Zimbabweans we acknowledge and welcome the growth of foreign direct investment (FDI) to US$410m in 2014 up from $65m in 2009, when Africa received as much as $281bn in FDI investment during the same period.

One of the Mugabe policies that has brought nothing but cheap shoes and clothing that might not even last a day on your back is the Look East Policy. While other African countries are getting the bulk of their FDI from the West, Zimbabwe is getting nothing from the favoured East.

According to Executing Growth, EY’s 2014 Africa Attractiveness Survey, the UK leads investment into the continent with 104 projects, while the US fell from joint first place to second place with 78 projects. South Africa, the third-largest investor, directed 63 investment projects into the rest of Africa. With such statistics, how then do you justify a Look East Policy?

It is deeply troubling that at a time when Africa is seen as the second most attractive investment destination in the world, Zimbabwe is being ranked among the most unattractive mining destinations. This is according to the latest survey by Canadian think-tank the Fraser Institute. In the 2014 Annual Survey of Mining Companies – which canvasses the views of mining executives from around the world – Zimbabwe is ranked 118 out of 122 jurisdictions.

While most Zimbabweans have managed to weather the storm and hang on through the hard times, the scary thing is that worse is yet to come. The tobacco farming season, which has been touted as a beacon of success for the land reform programme, is slowly losing steam. This year, overall output is not expected to surpass the 216 million kilograms that were achieved last year.

Nature seems to have burst the tobacco bubble with heavy rains negatively impacting production of the country’s biggest export earner. Andrew Matibiri, general manager of the Tobacco Industry and Marketing Board, said unusually heavy rainfall in December had hampered production, adding that Zimbabwe’s tobacco crop will fall to 190 million kilograms this year, down from 216 million kilograms in 2014.

Faced with the prospect of going home with nothing to show for their sweat, tobacco farmers disrupted auction on the first day of Zimbabwe’s marketing season as prices for the country’s biggest agricultural export plunged. Although prices have since improved, they are still below last year’s levels.

A decline in tobacco output and the average price has already been recorded in the first eight days of the selling season, attributed to the poor quality of the golden leaf. Statistics from the Tobacco Industry and Marketing Board show that the average price per kilogram of tobacco has declined by 17.80% to $2.25, compared to $2.74 per kg during the same period last year.

What this means is that some farmers will not be able to pay back what they borrowed to fund the crop. Some will only pay back what they owe and will be left with nothing to show for their sweat. Sadly, these are actually the fortunate ones because some lost their crop before they could even harvest. For those who have tobacco as the only source of income, it means no money for school fees and other basic needs, including food.

Talking about food, this year Zimbabweans are going to starve with government having already declared 15% of the food crops planted this season as complete write-off. Coming from government we know the figure is a conservative one; the actual outcome is much worse. What is however more scary is that on its own, government is unable to raise the cash needed to fund the grain deficit.

The government has therefore started issuing maize import licences to companies as part of efforts to avert food shortages, following a dry spell that has dampened prospects of a good harvest in many parts of the country. There is no question that erratic rains affected the harvest, but it is also a fact that the looming food crisis has several causes. Besides drought, there is the issue of lack of productivity following the land reform programme and government policy failures in agriculture.

Back in the day, farmers would have turned to irrigation to avert a national crisis, but some of the farmers who were given land destroyed the infrastructure that was on the ground and cannot turn to irrigation in times of drought. The other problem on the land is that farmers do not have security, hence they cannot put money into such businesses.

Farmers -whether black or white – are still losing farms, with those politically connected pitching up at successful farms with dubious offer letters. No one in their right mind would invest significantly in a farm politicians could claim any given day.

It’s high time that these greedy Zanu-PF backed politicians realise that “it’s not the hoe in someone’s hand that is ploughing, but it’s the strength of the ploughing hand”. – Fin24

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