Africa Moyo Business Reporter
President Mnangagwa, who swept to victory in last week’s historic harmonised elections, has the immediate task of turning around the economy particularly ensuring the availability of cash and pressing ahead with the re-engagement process.
Challenges of cash shortages have hit the country since May 2016 and the situation deteriorated mid last year.
Although the Reserve Bank of Zimbabwe has been promoting the use of plastic money, citizens still require hard cash for smaller transactions.
United Kingdom-based strategic analyst Mr Hopewell Mauwa, believes resolving cash shortages and international re-engagement, must be the first priorities.
“The immediate priority is solving the cash crisis,” said Mr Mauwa.
“The President has passed the first test of winning the elections in a peaceful environment (and) the second test will be on re-admitting the country into the global financial system. Zimbabwe needs external financial support from multi-lateral institutions to stabilise the cash shortages. The country has relied on domestic debt in the absence of foreign loans.”
Domestic debt has crowded out private sector financing at a time local firms are desperately in need of working capital.
This means the opening of new lines of external finance will be a welcome relief for the economy and that should be made possible with the President’s electoral victory, said Mr Mauwa.
Zimbabwe also has a huge trade deficit, which rose by 34 percent to $1,26 billion in the period February to June this year. Mr Mauwa said the trade deficit problem will be addressed through investment into the domestic productive sector to increase industry capacity utilisation.
“The political certainty brought about by President Mnangagwa’s electoral victory will (also) encourage foreign direct investment into infrastructure and the industry to flow into the country.
“This is an exciting period for Zimbabwe’s economic prospects and the Government need to get back to business and execute the promises that made them elected by the public.”
Job creation will be solved by the huge investment projects that have either been approved or are expected to be signed in the near future.
President Mnangagwa won the July 30 harmonised polls with clinching 50,8 percent of the vote in the presidential race.
MDC Alliance presidential candidate, Advocate Nelson Chamisa, got 44,3 percent of the 4 607 899 votes.
Zanu-PF got 145 seats in the National Assembly while the MDC Alliance won 63 seats.
Industrialists believe President Mnangagwa’s victory is set to thrust the economy on a growth trajectory, taking advantage of the momentum gained before the elections.
The doing business environment has dramatically shifted in the last eight months of President Mnangagwa’s administration, mainly after the tweaking of the Indigenisation and Economic Empowerment Act.
The Act, which demanded that locals hold 51 percent shareholding in foreign owned firms, was seen as an albatross on the country’s ability to attract foreign direct investment.
In his inauguration speech of November 24 last year, President Mnangagwa declared that he would anchor economic transformation on a strong agricultural sector and foreign direct investment. Since the declaration that ‘Zimbabwe is open for business’, the country’s premier investment promotion body, the Zimbabwe Investment Authority (ZIA), says it has approved investment applications worth $16 billion in the six months to June 30, 2018.