While South Africa continues to maintain a dominant sourcing role for Zimbabwe consumer goods, from a trade perspective the outlook for the country is bleak in the view of Africa consultant Duncan Bonnett of Whitehouse & Associates. “The economy isn’t recovering, the banks are in trouble and Zimbabwe has for many years run trade deficits. The country isn’t manufacturing much and the mining sector is providing the bulk of export revenues. Imports are far greater than exports which is not sustainable.” From a South African perspective it remains a lucrative export market. “Most of their imports are sourced from here – particularly the large retailers – although they may not be manufactured in South Africa.” The country however remains an enigma. Every year analysts say it just can’t carry on, that something’s got to give, and somehow it ticks over.” A lot of economic activity is in the informal sector, says Bonnett, with a large amount of informal trade between South Africa and Zimbabwe and Botswana and Zimbabwe. For 2015, he believes everything comes back to politics. “It’s a very difficult market to make any rational forecast because of the problems. My own view is that the economy will carry on struggling for the year and I don’t think it will get any better any time soon unless there is a massive reorientation of politics – and you can’t see that happening within the current leadership in ZANU PF.” And an uncertain environment doesn’t support trade growth. “In terms of the indigenisation legislation they are demanding a 51% share of foreign and local businesses in many sectors. Their five-year plan states that this percentage is open to negotiation which in some ways is worse than having a stipulated figure because it opens itself up to all sorts of ways for the powerful to entrench themselves.” In terms of Chinese investment in the country, there’s not nearly as much as the Zimbabwe government would like to see. “There’s a limit to Chinese largesse. Chinese development assistance is predicated on what China can get out of the deal. It’s not a benign friendship – if they feel Zimbabwe doesn’t offer them very much, they’re not going to look at any long-term credit lines and assistance, particularly with a country that probably won’t be able to pay back a long-term credit line any time soon.” INSERT & CAPTION The economy is likely to carry on struggling for the year and won’t get any better any time soon unless there is a massive reorientation of politics. – Duncan Bonnett
