The Zimbabwe Review: economy

Showing posts with label economy. Show all posts

Interrogating Mthuli Ncube's 'Austerity for Prosperity': Will ESAP 2 work where ESAP 1 failed?*

Aug 19, 2019

In the weeks leading up to the poorly kept secret of his impeding appointment, he campaigned hard for the position, coming out of a long diasporan silence to write articles outlining what he would do to tame Zimbabwe’s unwieldly economy. His many slavish supporters played up his scholarly qualifications, the international finance organisations where he had been a functionary and so forth.

It was as if the man could walk on water like Jesus purportedly did, or leap over skyscrapers with a single bound, like Superman. Given all the hype around him, his eventual appointment in October 2018 was almost an anti-climax.

It wasn’t long before he began to backtrack on some of his pre-appointment expressed views, such as the need to swiftly ‘abolish’ the widely derided ‘bond note’ currency/non-currency (which it is depends on who you ask, and what time of day it is.) Having been parachuted into his position after more than a decade in places like Switzerland, the Zimbabwean social, economic and political realities quickly, rudely began to dawn on him.

What the Affirmative Action Group fails to understand about banks

Oct 17, 2012

The Affirmative Action Group is a 'pressure group' for 'economic empowerment.' As such, a big part of their reason for existence is just to be provocative, to make various parts of what can be considered 'the establishment' (government, banks, industry, etc) squirm. At this rabble-rousing role the AAG is very effective. As the claimed representatives of a section of aspiring entrepreneurs, they more broadly seek to make the general operating environment more favorable for up-and-coming businesspeople. That necessarily means a big part of the AAG's focus is on access to finance. Their expressed thoughts on this matter suggest that they may have completely unrealistic expectations about this issue.

Iran's Zimbabwe experience

Oct 2, 2012

Iran is besieged by economic sanctions by the western world because they are not happy about its desire and plans to be nuclear-armed, just like the sanctioning countries. There are strong parallels between what Iran is experiencing now and what Zimbabwe went through in the several years up to the beginning of gradual economic normalization in 2009.

Are Zimbabwe's 'liquidity challenges' real or a mental construct?

'Liquidity crunch' is probably the most fashionable expression in Zimbabwe at the moment. Certainly it is probably true that one hears many people talk about how hard it easy to get hold of (earn) money in the now U.S.dollar-denominated economy. But is the 'liquidity crunch' the problem, or is merely a symptom of deeper, larger problems?

Is the aid-dependent neocolonialism in Malawi what would be in store for Zimbabwe under an MDC government?

Jun 1, 2012

by Chido Makunike

New Malawian president Joyce Banda has wasted no time in trying to undo as much of the legacy of her late predecessor, Bingu wa Mutharika, as possible. Her main thrust can be quite simply summarized as: bend over backwards to do all that is necessary to appease the Western 'donors.' A deep practical and psychological donor dependence on the West is nothing at all new in Africa. It is a major, tragic hallmark of relations between post-'independence' Africa and its former colonizers. But in recent years there had begun to be a stirring of African interrogation of this debilitating disease. It is therefore startling that in 2012, there is an African president who appears to almost proudly put the dependence of her country on foreign 'donors' as the cornerstone of her plans for her country's future. Would a similar fate befall Zimbabwe under Morgan Tsvangirai and his MDC party if they came to power?

Okonjo-Iweala's candidacy and how Bingu wa Mutharika’s World Bank experience didn’t seem to be of much help to Malawi

Apr 7, 2012

The death of Malawian president Bingu wa Mutharika at 78 of a heart attack seems to have been met with very little public sorrow. Yet he came into office in 2004 on a wave of popular support, tremendous goodwill and with his country folks’ very high expectations of what he would achieve for Malawi. One key reason for those high hopes was that he was formerly ‘a World Bank economist.’ What are we to make of the fact that such an impressively pedigreed ‘technocrat’ has left ‘the warm heart of Africa’ with such cold feelings towards him?

The missing links in Zimbabwe’s drive for a successful China-like State capitalism

Feb 14, 2012

by Chido Makunike

Today’s China is perhaps the most successful example of ‘State capitalism.’ There are those who caution that the model is not all it seems, and that it is not sustainable. Even if that were the case, there is no doubt that China has become a dynamic global economic power under a type of controlled free market economy largely run by the State. Why has China’s model of State capitalism worked, while those of countries like Zimbabwe flounder?

No loans to actual farmers in Agribank’s ‘very good loan book’

Agribank seems to have pulled off the neat trick of 'supporting agriculture,' but very carefully avoiding lending to the people who actually work the land; farmers.

Talk of Chinese Yuan reserves causes hysteria in Zimbabwe, but is no big deal in Nigeria

The Chinese are causing consternation all over with their explosive economic growth and rising global influence. In many countries there is heated debate on the pros and cons of unavoidable relations with China. The peculiarities of recent Zimbabwean political and economic history mean that there is an almost emotional hysteria to discussion about various aspects of the country’s strong and growing links with the rising Asian giant, especially amongst critics of the relationship. An example is the frightened resistance to the idea of recognizing China’s growing global economic power and role as increasingly important trade partner of Zimbabwe’s by adopting its Yuan as the reserve currency instead of the US dollar,

In parts of Harare, as elsewhere, a deep fear of the rising Chinese

Jan 31, 2012

The intricacies of currency are of little interest to most people. Hyperinflation changed much of this for Zimbabweans. Fear of the very idea of a local currency runs deep, and for now, many people are comforted by the country’s use of various foreign currencies, including the US dollar and South African Rand. With the growing economic role of China in Zimbabwe and the world in general, a surprisingly contentious debate about adding the Yuan to the currencies used has arisen. The article ‘To Yuan or Not to Yuan, That Is the Question’ represents a particularly irrational take on the subject.

A characterization of Uganda that sounds a lot like Zimbabwe

An article in a Ugandan publication serves as a useful reminder that none of the problems that Zimbabweans are grappling with are unique to their country. The exact nature and extent of the problems may differ, but there is a surprising same-ness to the issues, their causes and the sense of leaders whose concerns are very distant from those of ordinary citizens.

Is IMF/World Bank work experience good recommendation for leadership in Africa?

Jan 20, 2012

Chido Makunike

One of the most socially prestigious kinds of work experiences a person can have on his or her CV in Africa is a senior position at the United Nations, the World Bank, the International Monetary Fund or similar institution. Almost no one knows what being ‘director’ or ‘senior vice president’ at these organizations involves, but the social cachet that goes with it for an African is tremendous. Inevitably, very often the next mountain these international bureaucrats believe their experience qualifies them for is to lead their country. But is this kind of career background particularly good recommendation and experience for problem-solving in Africa?

Using Nigeria’s oil curse lessons to avoid a diamond curse in Zimbabwe

Jan 15, 2012

Nigeria is in turmoil as the country’s citizens react in outrage at the government’s lifting of an oil subsidy that kept petroleum products priced low. Almost all articles about the crisis mention how many Nigerians consider that the subsidy is one of the few ways they benefit from their country’s vast oil wealth. Are there lessons from this for Zimbabwe as it quickly becomes a global diamond powerhouse?

Zimbabweans’ peculiar but understandable aversion to the re-introduction of a local currency

Dec 30, 2011

The Zimbabwean dollar will for many always be associated with the country’s terrible era of hyperinflation. Its replacement by the adoption of primarily the US dollar as the currency of official use killed off that hyperinflation overnight. The Zim dollar was mourned and is missed by almost no one. But as it becomes increasingly obvious that the use of the US dollar cannot be a long-term strategy, there remains a visceral popular reaction to the idea of introducing local currency. The country’s unique hyperinflationary trauma means that it is one of the relatively few societies in the world where pride in having its own currency is much less than the fear of it.

ZANU-PF’ ‘empowerment, MDC’s ‘more investment’ need not be seen as contradictory

Dec 28, 2011

ZANU-PF and the MDC will start 2012 with a heightened awareness that a crucial election for them and for the country is not far away, whatever the final dates will be. As the parties sell themselves to the voters, it has become clear that their visions of how to bring about an economically prosperous Zimbabwe are starkly different. But are ‘empowerment’ and ‘attracting investment’ best thought of as opposing philosophies, or as two sides of the same coin?

Why the Mugabe government would never accept HIPC to offset Zimbabwe’s debts

Dec 16, 2011

Zimbabwe has an external debt said to be worth US$ 7billion. Most of it has not been serviced for several years. As the value of the debt continues to creep up from accruing interest, there is little prospect of the debt being paid from the proceeds of slowly recovering economic activity. The MDC minister of finance is inclined to accept Highly Indebted Poor Country (HIPC) status as part of measures to address this debt. But as long as President Mugabe and ZANU-PF remain effectively in control, there are reasons why there is almost no chance of Zimbabwe following the route that other unsustainably indebted countries have agreed to in order to offset much of the debt and get a new start.

Zimbabwe, world: start preparing for a Chinese yuan in your future

Dec 15, 2011

With China’s dramatic economic rise and spreading global influence, there are increasing discussions about how its currency, the yuan. will influence world financial markets and trade. In Zimbabwe, where the local currency was abandoned to kill hyperinflation and replaced with a multi-currency regime, proposals by some to add the yuan have been met with surprising heat and emotion.

The economic implications of Zimbabwe's growing taste for rice

Dec 14, 2011

A leading Zimbabwean food company has just opened a new rice processing plant. It says there is a growing local demand for rice, which is becoming more of an everyday food starch than before, when it was usually eaten on special days or occasions. A seemingly innocuous dietary trend could quite unintentionally have big long term implications on the country’s food security, by contributing to dependence on a staple food the country has almost no prospect of being ever self sufficient in.

Community share schemes: more questions than just about political gimmickry

As part of its campaign strategy for a crucial upcoming election in which it must seriously consider the prospect of being beaten by the MDC, ZANU-PF has embarked on a shakedown of mining and other big companies. The shares they are being persuaded or arm twisted into ceding to local communities have been described by some as an ‘election gimmick.’ They probably are at least in part, but there are other even serious questions about them that remain unanswered.

Perhaps Zimbabwe’s real problem is of dysfunctional values needing change, not just bad politics

Dec 1, 2011

by Chido Makunike

It is understandable that many Zimbabweans look to the political arena for the big answers to the many problems that plague their country. Many hope a pivotal election in the next year or so will be clean and decisive enough to set a clear direction and provide certainty for the country in a way it seems to lack now. Could this reposing of trust in the political process be misplaced?

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