Africa News blog
African business, politics and lifestyle
With global risk aversion decreasing there has been renewed interest in frontier markets.
They don’t come much more frontier than Zimbabwe, which is where Investec Asset Management is looking to make one of its newest investments – buying into a supermarket chain – and then for other potential opportunities.
Despite the continued political troubles since President Robert Mugabe and old rival Morgan Tsvangirai put together a power sharing government just over a year ago, Zimbabwe’s economy grew last year for the first time after a decade of debilitating decline. Growth was estimated at nearly 5 percent.
Returns on the stock market have been even better, although trading remains thin. The ZSE Industrials Index is more than 160 percent above where it was a year ago if down 20 percent from its high last October).
The United Nations has joined Zimbabwe’s power-sharing government in appealing for more than $700 million in humanitarian aid for the ruined country.
But while Western countries may show willing when it comes to emergency aid, they are still reluctant to give money to the government between President Robert Mugabe and Prime Minister Morgan Tsvangirai, his old rival.
The acknowledgement by Zimbabwe’s central bank governor that it raided the private bank accounts of companies and donors to fund President Robert Mugabe’s government during the economic crisis has increased speculation over his fate under the new national unity government.
Central Bank Governor Gideon Gono said the central bank took foreign currency from private accounts to help pay for some $2 billion in loans to state-owned companies and utilities and for power and grain imports. He said the government still had to repay about $1.2 billion, so the bank could repay the money it owes.
President Robert Mugabe joined the mourning for Prime Minister Morgan Tsvangirai’s wife on Tuesday and called on Zimbabweans to end violence and support his old rival to help rebuild the country.
The death of Susan Tsvangirai in a road crash in which her husband was also injured has, at least on the surface, brought about a show of unity between Zimbabwe’s bitterest foes that might never have looked possible.
Tsvangirai vowed to rescue the stricken economy and called on the international community to help salvage the economy of Zimbabwe where unemployment is above 90 percent, prices double every day and half the 12 million population need food aid.
from Global News Journal:
Southern African leaders have decided at a summit that Zimbabwe should form a unity government next month but the opposition said it was disappointed with the outcome, raising doubts over chances for ending the crisis.
The 15-nation SADC grouping said after the meeting in South Africa - its fifth attempt to secure a deal on forming a unity government - it had agreed that opposition MDC leader Morgan Tsvangirai should be sworn in as prime minister by Feb. 11.
from Global News Journal:
From a distance it is always hard to picture just how hard life is in Zimbabwe and to imagine how much worse it can get. For so long we have been writing about economic collapse, inflation statistics beyond comprehension, the fact that at least a quarter of the country has fled to seek work abroad and that life expectancy has tumbled.
Commentators have long spoken of the dangers of a possible ‘meltdown’. The signs of what that might look like have grown stronger this week.
For Zimbabwe’s long-suffering people, the true meaning of the signing of a power-sharing agreement between President Robert Mugabe’s ZANU-PF and the opposition MDC would be how quickly it leads to an improvement in their daily lives. An economic crisis that began in 1998 has turned the once prosperous Southern African country into a basket case economy with the world’s highest inflation at over 11 million percent. Millions of Zimbabwean’s who have fled across the borders to escape unemployment and severe shortages are waiting to see if the political deal will result in economic rebound paving the way for their return.
The agreement negotiated by South African President Thabo Mbeki provides for the sharing of power between veteran President Robert Mugabe and Morgan Tsvangirai, leader of the main opposition Movement for Democratic Change (MDC). Tsvangirai takes on the new role of Prime Minister with extensive powers, with Mugabe’s 28-year hold on power significantly eroded.
All economies, no matter how decrepit, can be revived through good institutions and economic freedom. That said, it is impossible to predict how quickly the people of Zimbabwe will be able to enjoy a notable improvement in their standard of living.
Zimbabwe today is one of the least politically and economically free countries in the world. The speed of Zimbabwe’s social and economic recovery will depend on the speed and extent of reforms.
The signing of an agreement between Robert Mugabe’s ZanuPF party and the two formations of the MDC marks the beginning of an exciting period in the political history of Zimbabwe. The national economy has been devastated by, inter alia, disastrous political and economic policies formulated and implemented by the Mugabe regime. Fortunately, most of the development and economic infrastructure still remains largely intact, and the Zimbabwean economy could recover from the current meltdown in a fairly short time.
Zimbabweans are reputed to be hard-working people. Although many highly skilled Zimbabweans have since left the country for greener pastures both in the region and further afield, the country still boasts a highly skilled labour force.