Zimbabwe has had a tough couple of years, but thanks to the stability formed through a power-share agreement, the country may just be on the right track.
By Craig Falck for Africa Report
Photograph: © Steve Mann | Dreamstime.com
Zimbabwe’s economy has been hung, drawn and quartered by political unrest. Times are changing, however, and if a Reuters report is anything to go by, the country’s economic growth prospects look good for the year ahead.
The last two years have seen Zimbabwe slowly but surely building its way back to economic stability. In his report, Banya of Reuters writes that, “Zimbabwe’s Finance Minister Tendai Biti expects the economy to expand by a further 9.4 percent in 2012 from a forecast 9.3 percent last year, mainly on the back of a rebound in agriculture and mining. Inflation is projected to average 5 percent this year.” This is a very positive outlook for a country that just a few years ago was issuing Billion-Zimbabwe dollar bank notes that would only buy the holder a loaf of bread.However, the country isn’t out of the woods yet, despite the political agreement that was brokered between President Robert Mugabe and Prime Minister Morgan Tsvangirai. “The on-going implementation of the indigenisation and economic empowerment laws and the expected national elections in 2012 continue to weaken external investor confidence,” Banya writes.
If Zimbabwe is to achieve the targets set by its government departments in terms of economic growth in 2012, it needs a stable political environment and a stable economic atmosphere. The country also needs international prices to remain constant or increase levels of output that will see money coming into the Zimbabwean economy and building up its GDP. Still holding the country’s economy back though, is the Government’s strong control legislation on foreign-owned businesses, the most important and lucrative of which are the mines and financial institutions. This tough legislation that Robert Mugabe passed years back and hasn’t yet lifted has caused investors to remain very sceptical about putting money back into the country for fear of what legislation could be passed next, perhaps causing them to lose a significant portion, if not all, of their money.
Zimbabwe is a once-powerful economic country that has fallen on tough times. However, its people are slowly but surely rising again, and 2012 could be a very important year for them and their country in the global economy. However, a couple of factors need to come to the party for that to happen, so we, and the rest of the world, will wait with bated breath to see if they boost the country or hold it back.
Source: http://af.reuters.com/article/topNews/idAFJOE80402R20120105
