The Covid-19 pandemic has left a trail of destruction on Zimbabwe’s beleaguered economy which was already facing massive headwinds before the advent of the virus.
As early as February, experts were pointing towards yet another challenging year for the economy and matters only got worse with the rise in Covid-19 cases prompting authorities to impose a total lockdown to curb the spread of the pandemic.
While the effect of the lockdown had a damning effect on the economy in general, the impact was varied depending on the sectors.
In his presentation on progress on government’s economic blueprint, the Transitional Stabilization Program (TSP), Finance and Economic Development Minister, Mthuli Ncube outline the impact Covid-19 has had on the economy.
More than a quarter of the world was under lockdown starting in March this year and this affected demand for commodity prices.
Ultimatley, this had an adverse effect on the mining sector.
To give perspective, the Zimbabwe Consolidated Diamond Company (ZCDC) had about 300,000 carats of diamonds due for auction at the beginning of April and had to put on hold the sale due to air travel restrictions as nations went on lockdown.
Perhaps the biggest loser from the pandemic was the tourism sector.
According to the Finance Ministry, there was an 80 percent drop in international air and passenger traffic. The country suffered a 60 percent drop in tourist arrivals and more worryingly was a sharp decline of 90 percent in hotel occupancy leaving hoteliers in dire strain.
But the effect the lockdown had on the financial services sector cannot be overemphasized.
Banks recorded negative interest on loans and the Non-performing loans increased.
In May, one of the leading banks, First Capital Bank announced that it was restructuring its loan book with various struggling companies particularly in the tourism sector that had requested for restructuring of their loan facilities and repayments.
Heavy industry manufacturing sector was also affected by the lockdown measures as financing was constrained.
The workforce also suffered massive losses with companies forced to lay off contract workers while others were put on indefinite unpaid leave.
Due to shorter working hours, most companies felt the pinch on their operations.
Retail giant, OK Zimbabwe Limited’s sales volume for the quarter to June 30, 2020 plummeted by 32 percent.
But on the flipside, some sectors emerged big winners from the Covid-19 pandemic.
Companies in the food manufacturing sector were granted essential services status and despite shorter hours, demand for their products increased.
Arguably the biggest winner from Covid-19, the Information Communication Technology (ICT) sector beamed during the period.
Telecoms companies reaped profits from the increased use of data and internet by both individuals and corporates during the lockdown.
According to the Postal and Telecommunications Regulatory Authority of Zimbabwe (POTRAZ), during the second quarter of 2020 mobile internet and data traffic increased by 56,2 percent to record 10,407TB from 6,661TB recorded in the previous quarter.
Used international internet bandwidth capacity also grew by 2,8 percent to record 128,173Mbps from 124,627 Mbps recorded in the previous quarter.
The regulator forecasted a further growth in Internet/data traffic due to the increased adoption of e-learning, telecommuting, and e-conferencing.
Indeed the pandemic has brought the need to adapt to the “new normal” with new opportunities emerging particularly in doing things remotely which is positive for the tech sector but these new opportunities have brought fresh tests to conventional means of doing business.
For conventional conferencing facilities for example, there is great need to rethink the future as e-conferencing could just be the new way of doing business.
