Waiting for the polls | Business Times

The economy is at a standstill with a wait and see attitude prevalent in corporate boardrooms, 40 days before the August 23 harmonised elections.

Corporate executives are sitting on the fence as they are cautiously optimistic about the outlook.

As we reported elsewhere in this edition, the two stock exchanges have also paused, spooked by elections and a liquidity crunch.

Securities firm, FBC Securities, said liquidity conditions in the economy continue to have a strong impact on market performance.

“Ahead of the 2023 general elections, we also expect a cautious sentiment to prevail among investors as they continue to assess the impact of the elections on business. Historically, election periods have been marred by economic volatility and bouts of violence, which may dampen investor confidence,” the firm said.

It’s not only in Zimbabwe that the economy pauses ahead of a key election. A cautious approach has become the famous template ahead of elections in other markets.

For Zimbabweans, they are approaching elections with an economy that has stabilised in the past few weeks after the sharp depreciation of the local currency from May up to last month.

This was a result of tight fiscal and monetary policy measures to stabilise the economy.

The measures seem to have struck the right chord with the local currency appreciating against the greenback, firming to ZWL$4,998.8352 per dollar at Tuesday’s wholesale auction from ZWL$5,251.0640 last week.

The appreciation of the local currency has stabilised prices in the interim.  But there are fears the ZWL$ liquidity crunch slows economic growth as it reduces spending. It also leads to a cut back on production thereby reducing capacity utilisation.

Treasury has not loosened the purse strings, an occurrence in the run up to previous polls.

The campaign period has not been rosy for the Citizens’ Coalition for Change which accuses authorities of tilting the playing field in favour of the governing party after the police denied them permission to hold rallies.

To neutrals, the campaign field should be level and any favouritism towards the governing party throws into question the credibility of the polls which is key for Zimbabwe.

President Emmerson Mnangagwa has promised a free and fair election. A free and fair election is one of the deliverables the government has to make as it seeks to normalise relations with multilateral financial institutions.

Pockets of violence have emerged which is an affront to the holding of a free and fair election. Previous disputed elections have left the economy broken and citizens divided.

It has left citizens with scars of violence that are still visible even today.

The August elections are a signpost to the world on whether Zimbabwe has shed its bad boy tag of the past.  It cannot continue to be the sick man of Sadc.

The polls will give the corporates and the international community the signal on the next step.

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