There are a number of political and economic parallels that will affect the flow of goods between the historic trading partners and neighbours South Africa and Zimbabwe. For a start, both have new leadership at the helm. Writing in the Intelligence Bulletin, Garth Cilliers of Africa Watch points out that both countries are potentially entering a new era under new leaders. But, there are still many unanswered questions about whether the change in leadership is more of the same, or if it heralds the change that is needed to promote economic revival and the much-needed job creation in both countries which share so much history as former British colonies. A bilateral trade agreement between the two dates back to 1964. Both are also part of the SADC Free Trade Area. As one of South Africa’s top five trading partners on the continent, Zimbabwe represents an important market for a wide range of manufactured goods and foodstuffs. At the same time South Africa is Zimbabwe’s biggest trading partner. According to ZimStats, the country earned US$2 245 249 394 from exports to South Africa in 2013. Imports from South Africa amounted to US$2 152 798 816. According to Cilliers, one of the most urgent issues that both president Emmerson Mnangagwa of Zimbabwe and not-yetpresident of the country Cyril Ramaphosa need to grapple with is land reform – but from different perspectives. One (Mnangagwa) has to revive the country’s agricultural sector, while the other (Ramaphosa) has to ensure that land reform does not have the same devastating economic effect in South Africa as it did in Zimbabwe. The effectiveness (or otherwise) of the reforms will have a direct impact on what is being carried by road and rail and what moves through the ports serving the two countries – either imports of food aid or imports of fertiliser followed by exports of surplus product. Both leaders will also have an eye on upcoming elections. Zimbabwe is due to go to the polls this year, and South Africa in 2019. A risk to companies doing business in both countries is that the ruling parties will introduce populist measures which are not economically sustainable in order to garner votes. Political analyst Daniel Silke has identified nine “scary” parallels between the two countries on either side of what Rudyard Kipling described as the “great grey-green, greasy Limpopo River”. Ranging from the dominance of single political parties to rhetoric (such as “radical economic transformation” in South Africa and “indigenisation” in Zimbabwe), these risks could continue to have a long-lasting effect on economic growth and therefore the flow of goods. “By sticking to ideologically-motivated revolutionary rhetoric and false and flawed interpretations of nationalism, you risk creating the environment for a failed state,” Silke wrote in Business Report in November 2017. More recently, Silke is wrote in Fin24 “make no mistake, the pressure is on. Ramaphosa has to restore investor and voter confidence rapidly. The economic malaise demands attention.” Across the Limpopo Gene Leon, IMF mission chief for Zimbabwe, warned in November 2017 that the country’s economic growth was threatened by high government spending, an untenable foreign exchange regime and inadequate reforms. What was true under president Mugabe remains true under president Mnangagwa.
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The economic malaise demands attention. – Daniel Silke
