Pessimism Grips Captains Of Industry
Captains of industry have warned that the economic situation will likely deteriorate in the second half of 2022 due to policy inconsistency and upcoming elections.
Zimbabwe’s year-on-year inflation climbed to 192% in June from 132% in May, according to the Zimbabwe National Statistics Agency (ZIMSTAT).
However, Steve Hanke, a professor of applied economics at Johns Hopkins University in the United States of America, says Zimbabwe’s annual inflation rate is 426%, the highest in the world.
Zimbabwe National Chamber of Commerce (ZNCC) CEO, Christopher Mugaga, told Business Times that the economic situation will only get worse. Said Mugaga:
The second half of 2022 looks gloomy as a result of a high level of uncertainty as a result of drastic policy announcements by the government and a build-up to the 2023 general elections as we navigate the torrid policy landscape.
One can actually conclude that we as a country have been consistent at being inconsistent and it is slowly becoming a norm.
ZNCC immediate past president Tinashe Manzungu also believes that the upcoming harmonised elections will negatively impact the economy. He said:
Election headwinds are filtering into business activities as the country prepares for the 2023 general elections and businesses’ concerns are being sidelined as the policymakers pursue pro-poor policies to gain election mileage.
The ‘political business cycle’ is not in industry and commerce’s favour during the one and half years.
In this regard, the Chamber had a well-placed theme that talks about the business community devising ways to bolster resilience and innovativeness to weather the storms.
Economist Gift Mugano forecasted a bleak future arguing that due to upcoming elections, resources will be unevenly distributed as politicians try to garner support. He said:
There is a huge likelihood of unproductive money creation since we are getting into an election season and it is likely to affect economic functionalities as resources will not be evenly distributed to other key sectors of the economy.
The government has been campaigning using populist programmes like Pfumvudza and Command Agriculture to reach out to people and it’s not a coincidence that banks have started lending, a thing which they have not been doing in the past years.
That’s where we start to see high non-performing loans after the elections; the politicians will do this to garner support at the expense of the economy.
… If we analyse our capital expenditure was usually at 10% but with infrastructure and agriculture projects, the government has pushed it to above 34% which is very abnormal for an economy like ours.
