Build on gains made prior to elections

Following a number of factors, including a surprise depreciation in the exchange rate and a rise in fuel prices last week, Zimbabwe is in danger of losing all the gains it had made prior to the harmonized elections held on August 23 and 24.

Now that a Cabinet is in place, we implore President Emmerson Mnangagwa’s administration to build on the accomplishments made including the financial stability and the adequate electricity supply experienced prior to the harmonized elections .

The situation must not worsen because the public might be led to believe it was a political ploy to win support for the ruling Zanu-PF party.

Mthuli Ncube, the minister of finance and investment promotion, and David  Mnangagwa, his deputy, face a monumental challenge in trying to rescue the economy from its problems, which are characterized by a variety of social and economic headwinds.

Currency and exchange rate volatility, unsustainable recurrent expenditure, a shrinking tax base, a resurgent crippling power crisis that is starting to cripple industry, and an unsustainable debt burden that is harming the economy are just a few of the difficulties the government is facing.

The tax collector ZIMRA is tasked with developing and implementing workable strategies to tax the informal sector due to the increased informalization of the economy.

Zimbabwe’s struggling businesses are fighting to stay afloat as the country’s economy continues to deteriorate. Numerous businesses are closing, adding to the growing corporate graveyard.

After firming against the United States dollar just before elections held last month, the Zimbabwe dollar is losing value again against all major currencies.

This week, the Zimbabwe dollar was trading at ZWL$4 712.16: US$1 from ZWL$4 604.62:US$1  three weeks ago.

On the parallel market , the Zimbabwe was yesterday trading at ZWL$7 500 : US$1 from US$6 000:US$1 three weeks ago.

The main opposition party Citizens Coalition for Change (CCC) vigorously contested the results of the recently held harmonised elections, refusing to accept the results and calling for a new election on the grounds that the election was not free and fair. This made the situation worse.

Due to this, cash-strapped Harare is now vulnerable and could  drag down inflows of foreign direct investment.

 

Related