Economic research firm Morgan & Co has cast a gloomy economic outlook for the country ahead of the up-coming general elections citing the effects of political tensions already brewing.
Since the turn of the millennium, the country has overseen a series of violent elections with economic consequences.
In its Economic Outlook report for 2023, Morgan &Co gave a chilling warning of a confluence of the previous year economic headwinds converging with rising political tensions as likely to derail economic stability this year.
“2023 is an election year for Zimbabwe and it will be characterized by volatility. The stakes are high and politics will have a strong impact on the economic direction of the country,” said the research firm.
“Clearly the turbulence of 2022 weighs heavily on our investment outlook for 2023 with implications ranging from inflation, interest rates, and earnings valuations to investor sentiment. Zimbabwe has gone through episodes of economic recessions and the political environment has not changed given that international isolation, uncompetitiveness, corruption and a colossal debt overhang remain.”
Zimbabwe’s economy is currently in doldrums faced with a weak currency, exchange rate volatility, energy crisis, low levels of investment and policy inconsistencies.
According to Treasury, the economy will grow by 3.8 percent this year driven by the mining, construction, agriculture and accommodation sectors. However, analysts are skeptical of government growth figures citing the huge impact of the energy crisis on productivity.
“An analysis of past events in Zimbabwe indicates that it is very likely to experience some level of political violence in 2023. Political violence towards and during polls has always been a big issue,” the report says.
“For example, in January 2019, protests broke out in major cities after the government more than doubled fuel prices to tackle fuel shortages and the black market. In addition the government ordered a partial internet shutdown and mobile and internet services providers were ordered to block citizens from social media sites.”
According to analysts, the economic impact of the 2019 January political violence and the subsequent internet shutdown spread into hundreds of millions of American dollars in losses for the economy.
Already political tensions are brewing following the recent incident in Murewa where elderly members of opposition party, Citizens Coalition for Change (CCC) were brutally attacked for supporting the party.
The opposition party claims that the ruling party is targeting its supporters and in some instances using state institutions such as the judiciary to persecute its members ahead of the elections.