COUNTRY IN FOCUS
in the world, and still provides ample opportunities for explorers, miners
and brave investors.
A frustrating roller coaster
“It’s frustrating for all Zimbabweans,” said David Coltart, one of the
founding members of the main opposition party in Zimbabwe, the
Movement for Democratic Change (MDC), and someone who once served
in the Mugabe-led cabinet. Coltart was the keynote speaker at a recent
event organised by the Free Market Foundation in South Africa. “After
independence in 1980 Zimbabwe was the second strongest economy in
southern Africa and one of the strongest in Africa. It is now being reduced
to a catastrophic state. Now we have a country with one of the weakest
economies in the world,” said Coltart.
“The international press is tired of the Zimbabwe story, and I don’t think
there is an understanding of the nature of what I term a threefold crisis in
Zimbabwe: political, economic and humanitarian,” says Coltart.
Currently Zimbabwe is going through yet another economic and currency
crisis. When this article was written the Zimbabwean government had
just announced that it would raise public servants’ salaries. According
to finance minister, Mthuli Ncube, this was done to mitigate the
consequences of inflation on people’s purchasing power. When the
pay rise happened, it was the second increase in three months after a
more than 29% increase in March. Earlier, in a much-critised move, the
Zimbabwean government decided to do away with the use of all other
currencies, including the US dollar, and reintroduce the Zimbabwean
dollar by the end of the year. This inevitably resulted in a soaring inflation
and raised fears of a return to the hyperinflationary period which sparked
an economic crisis in the first place. In May this year, the inflation rate
reached 97.85%, the highest level in ten years.
Electricity headaches
But spiralling inflation is not Mnangagwa’s worst headache. The country’s
lights have literally gone off, which could be disastrous for a revived mining
industry on which the president pinned his hopes to resuscitate the
economy. Zimbabwe’s major sources of electricity are not keeping up with
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“There was genuinely hope after the coup in 2017, but I felt the celebrations
were premature. But the business sector in Harare was excited with
the transfer of power from Mugabe to Mnangagwa. The international
community, especially the UK, felt this heralded a change. Many were taken
in by Mnangagwa’s rhetoric. But is Zimbabwe now open for business?
I sincerely doubt it,” he says.
Hwange Colliery has been underperforming, which places additional
pressure on the country’s constrained economic environment.
African Mining
African Mining September 2019
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