Perhaps the weirdest part of the social media campaign last weekend predicting total doom for Zimbabwe and a destroyed economy was that it was launched while the statisticians measuring the real economy were finding that Zimbabwe has made giant strides this year and is, in fact, climbing out of the mire.
This is why the Reserve Bank of Zimbabwe is able to kill the rumours of fuel shortages by simply doubling allocations for fuel. We doubt that all the extra will be needed, but when everyone who wants to buy diesel or petrol simply goes to a garage and waves a swipe card then vast numbers will think again the next time stupid rumours go viral.
There will still be those logistical hassles when everyone wants to fill their tank on Fridays, but flooding a market is the easiest way of crushing silly panic attacks. While the new facility from Afreximbank has given the Government and RBZ flexibility it is backed by real progress on the economic front. Our sister publication Business Weekly reports today that in the first eight months of this year exports rose 47 percent over the same period last year while imports, still rising as the economy grows fast, yet were rising a lot slower allowing the gap between the two to close by 26 percent.
And the gap was narrowing progressively. By August it was just $90 million. It is this progress that will end forex shortages. As soon as exports, plus Diaspora remittances plus foreign direct investment exceed controlled imports then a lot of things change very quickly. The RBZ and Government might still need to manage imports to give decent breathing space to our manufacturers, but can refine this process.
Zimbabwe’s industrialists, big and small, are using the breathing space they have been given by the temporary SI64 regulations and the careful management of a lot of export revenue by the Reserve Bank to seize their fair share of the market and more and more are doing so by offering the right product at the right price.
In other words more and more shoppers are choosing the Zimbabwean option because the combination of quality and price mean it is the best value. And the weekend panic showed the mettle of the industrialists. They refused to panic, they refused to profiteer. They even bought advertisements to make it crystal clear that temporary hold-ups in a supply chain were not a reason for them or anyone else to profiteer. And the big formal wholesalers and retailers also kept their heads and made business as usual.
The fact that exports to neighbouring markets, including highly industrialised South Africa, are also rising implies that local manufacturers and producers are getting it right. And by getting it right on the basics they will still be in business as controls are lifted; the last thing we now need is a return to the multi-decade controlled economy that eventually collapsed. We need to retain the flexible new economy we have built and still building. The net result of the weekend panic has been positive.
The Government, RBZ and the big formal business sectors have a lot of economic and political differences, but they now must realise that they are all pulling in the same direction, to grow Zimbabwe and move into sunnier economic times; their debates are in-house as it were and there must be a lot more mutual trust.
The informal sector took a battering, with even illegal currency dealers left with some expensive stock they are not going to offload quickly. But everyone also now sees the need for the RBZ to do more to enforce its own rules about banking cash and for the Government to start shutting down some less savoury sectors of the informal markets.
The informal sector can and must grow, but legitimately and by gaining and retaining credibility with customers. So the net result of a panic driven by false rumour has been to strengthen ties between consumers and credible producers and retailers, to allow those in positions of influence to see that disagreement over methods is incidental to the stronger agreements on goals. So in the end fact, credibility and hard work are winning out.