As the Transitional Stabilization Program (TSP) enters home stretch, the 2 year-economic blueprint set to end in two months’ time leaves a plethora of loose ends to what it intended to achieve.
From depressed external capital inflows, the resurgence of power cuts, inflation, low output from productive sectors to deteriorating standard of living for the general populace, most indicators remain clouded in uncertainty.
Launched in October of 2018, the TSP has made limited achievements much as a result of poor implementation of agreed objectives.
Despite notable achievements by the TSP such as the stabilization of the local currency and road infrastructure projects, the forecast remain bleak.
The country has remained in isolation and international creditors and investors have not been forthcoming.
The recent suspension of conglomerates, Old Mutual, SeedCo and PPC from the Zimbabwean Stock Exchange became testament that the country is yet to reform its property rights track record and market watchers are wary the move will deter investors.
Already, foreign direct investment fell from US$ 717.1 million in 2018 to US$ 259 million dollars in 2019.
On the macroeconomic level, growth projections for the country continue to decline, having recorded a -7.5 percent contraction last year, the IMF is already predicting a -10 percent for the current year.
“To be honest, the outlook is quiet bleak. In 2019 we anticipated a growth in the economy of 9 percent but we ended up registering -7.5 percent. In 2020 we anticipated a rebound but already the IMF is projecting contraction of -10 percent due to the Covid-19,” independent economic analyst, Victor Bhoroma told 263Chat Business.
“The current inflation rate is unsustainable. It is affecting consumer demand and this has an effect on a lot of factors including corporate tax. At over 750 percent, inflation rate will bring problems going forward,” he said.
Zimbabwe has struggled to rein on inflation since the reintroduction of a local currency over 18 months ago.
As a result, disposable incomes have been eroded, with public workers consistently at loggerheads with government over a pay rise.
Recently, Zimbabwe Congress of Trade Unions announced a series of protests over poor salaries, a development likely to persist until year-end.
Job losses and company closures as a result of both the impact of the Covid-19 and a negative business operating environment continue to affect most livelihoods.
On the production side, output is already being affected by the resurgent power cuts.
The national power utility company, ZESA owes South African power supplier, Eskom somewhere in the region of US$ 90 million and this debt is likely to affect power imports.
Agricultural production is also under threat as price of inputs is beyond the reach of many farmers and the switch to smart agriculture has left many farmers unable to acquire loans as a result of lack of collateral.
In a recent interview with the president of the Zimbabwe Farmers Union , Abdul Nyathi, preparations for the 2021 farming season are in jeopardy with most farmers failing to acquire inputs in the absence of government support.
