Carte Blanche with Perry

Leopold Takawira Street, Harare. Image Credit Flickr 2018 was a year of two contrasting halves for Zimbabwe. For the greater part of the year, Zimbabweans had the earnest expectation that the July 31 national elections would set the Southern African country on a sustained path of recovery. Events following the elections have, however, brought little respite, and have mostly served to highlight the true extent of the country`s troubles. Problems with fuel shortages, runaway inflation – the highest since the country dollarized in 2009 – and a dire foreign currency crisis threatening to cripple even the largest corporations in the country, have persisted. While government has set out an ambitious recovery plan through its Transitional Stabilisation Program launched last October, signs of progress have been scant. Instead, 2019 has thus far been characterised by industrial action by the country’s junior doctors, while public school teachers have also threatened to down tools, dem...

                               Carte Blanche with Perry (CBP) recently spoke to two investment analysts with exposure and interest in the Zimbabwean economy, to find out about Zimbabwe`s investments prospects in 2019. Lloyd Mlotshwa (LM), based in Harare is the Director and Head of Sales at the IH Group, a Zimbabwean financial services boutique firm that deals with local and foreign investors. Craig Bandason (CB), based in Cape Town is a Portfolio Manager at Imara Asset Management, an independent, non-bank financial services company. Below is the full transcript of the interview: CBP : What is your general outlook for Zimbabwe going into 2019? LM : Our initial view is bearish at least for Q1; we believe 2018 benefitted from enhanced money supply and strong performances in primary sectors (mining & agri) – this led to excess liquidity chasing goods and services as well as forex and forex l...

Harare Central Business District The recent announcement of the country`s official inflation data carries quite some far reaching ramifications for the local economy. Zimstat announced the annual inflation figure for October at 20.85%, far above the SADC region`s benchmark of 7%.  This is the highest inflation figure since the country dollarized in early 2009. In the 9 months to September 2018, inflation had averaged 3.58% according to Zimstat`s own data, with the RBZ forecasting that annual inflation for 2018 would end the year well below the 7% threshold. However, October alone saw inflation gaining by 15.46 percentage points, significantly overshooting the central bank`s targets. There has been widespread discontent over the authenticity of the data from Zimstat itself.  OK Zimbabwe recently reported an average internal rate of inflation of 12.2%, while the controversial Steve Hanke an economist at the Johns Hopkins University who tracks trouble...

Image Credit: Reuters Zimbabwe’s economy is bleeding, has been for a while, but the upcoming budget statement by finance minister Mthuli Ncube presents him with the opportunity to suture up the economic wounds. More importantly, this will be an opportunity to prove that he has the backbone to stand up for treasury’s independence and display its resolve in achieving long-term fiscal sustainability.  After all, that is the reason why he was headhunted by the Mnangagwa administration, in theory at least. The exact details of his coming on board as minister are not public but if there is any truth to rumours that he was initially hesitant, then he will have some considerable clout in pushing his agenda, to the extent that he had to be courted to accept the post. Events following his appointment as minister have been anything but smooth however. The seemingly never-ending contradictory statements from treasury and the central bank have all but contributed in creating warp...

Confederation of Zimbabwe Industries President, Busisa Moyo Reflecting on the meteoric rise of Sony Corporation shortly after its formation, co-founder Akio Morita wrote in his memoir Made in Japan: Akio Morita and Sony, “I believe one of the reasons we went through such a remarkable growth period was that we had this atmosphere of free discussion. We have never tried to stifle it.” It is worth mentioning that Sony was founded just after the end of the Second World War, against a backdrop of deep uncertainty, when Japan was starting to rebuilding its economy. Free discourse between Zimbabwe`s business sector and the government has broken down over the years. Numerous arrests, the hounding of business-people to the point of some even fleeing the country, and being branded as saboteurs has become something that local business-people are accustomed to.  These events hardly build trust and promote a healthy level of dialogue between government and the business community...

Zimbabwe Ministry of Finance Office Complex F or the outside observers, Zimbabwe’s economic environment is getting predictably unpredictable with each passing day. For a country that is seeking to woo, foreign investment, the recent actions by the monetary and fiscal authorities seem like a well-coordinated effort to do the exact opposite.  With virtually each action, the ministry of finance and the central bank officials increasingly appear to be a motley crew of amateurs experimenting with a loaded gun, leaving   nothing but a trail of destruction in their wake. The recent embarrassing debacle around the appointment of the controversial William Mutumanje, otherwise known as Acie Lumumba as the ministry of finance’s communications task force chair, and his subsequent sacking, as comical as it is, perhaps shows that Zimbabwe is not yet ready to be taken seriously in the global capital markets.  At a time when emerging markets themselves are in a st...