Dr Masimba Mavaza
The battle to beat the coronavirus is taking a heavy toll on the economy. The nation is trapped between the hard wall and the hard surface. A decision was to be made between quarantining the nation in the graves or in their houses. The effects of such an action are known. Some companies are likely to go into administration in a bid to help them survive during the lockdown, thousands of jobs are at stake. Beyond the short term economic crisis, it looks likely that younger workers and the low-paid will be most damaged by the shutting down of large parts of the economy. The economic crisis has moved from the stress indicators of global stock markets, which can often seem unreal and irrational, to the real world.
Market indices have stopped falling so fast and we are now beginning to get a sense of the scale of job losses.
The tourist industry was hit very hard with most hotels closed for the 22 days, with travel restrictions in place tourism has suffered a fatal blow. This underlines the heightened level of exposure for hospitality and tourism, and is a signal of how long this is going to affect the economy.
The prospects of sports potentially not returning until 2021, adds to that sense that it might be gloom, the future of our economy might not be certain.
Unemployment is likely to surge considering that our employment has been telling the Coronavirus will not do any good to the nation. We must hold our breath in real fear, it is not only death from the sickness that we should look at. But it might be death of everything our culture our being our life our being us.
The depth of our corona induced unemployment cannot be seen that quick. This is because a large percentage of the population is in informal employment. All these have been affected too bad by coronavirus. In Zimbabwe it seems we don’t have data that responds that fast to our predicament.
America has recorded over seven million people who lost their jobs due to corona and they are still counting.
In the UK the number of people registering for Universal Credit, went up to a million in just nine days. A lot of worklessness — that is, having nothing to do — is mitigated by the UK government pouring money into job retention schemes, both for the employed and the self-employed.
That may be a much bigger number than the UK government thought it would be. A lot of employers are turning to that as a means to keep people on their books, and to handle the sudden drying up of cash flow.
Now our Zimbabwean economy cannot sustain a scheme like the one in America and UK, where people are paid while not at work in-order to keep the jobs. What this means is as Zimbabwe, we might be in a fix. There is likely to be an unemployment, poverty and suffering.
Another problem will be that most cruel employers will hide behind coronavirus to fire people whom they had always wanted to dismiss. Coronavirus will be a scape goat. Can we be sure that those unscrupulous employers will open their doors for those they did not want in the first place?
Not if employers are seeing it as a stepping stone to redundancy.
A downturn like this is an opportunity for companies to shake out inefficiencies. The jobs market has been very tight, putting workers in a strong position.
But it’s suddenly switched to giving bosses more leverage to cut their payroll costs.
But recovery, depends on the Government and the Reserve Bank taking ever more unconventional measures. That looks like a hint of much more money-printing (in reality, the buying of bonds using money created by the Reserve bank, as only it can).
And to spark spending, it could push interest rates into negative territory, meaning we would have to pay the banks to look after our savings.
A huge amount of Government money has been committed to business grants, business rates holidays, loans and loan guarantees.
That’s borrowed money, of course, with the Debt Management Office saying that it’s about to auction £45bn of bonds .
The scale of the commitment is staggering. But for companies, borrowing money to get through this, however cheap that debt is, does not look that attractive to many in business, and less so when their banks add tough conditions when the Government lending is put out into the market.
Any shock or shakeout in the economy is going to push the weaker companies over the edge. So we began to see the collapse of some that were already a bit shaky, for various reasons.
Zimbabwe needs all Zimbabweans to come together and brave it out. Obviously some will try to blame the Government for the suffering which awaits us. Some political parties will use the suffering to come to create a rebellion and fight the government.
It should be known that the whole world is going to suffer after corona. The problems are not only peculiar to Zimbabwe. They are not the result of incompetence or corruption. They do not show the failures of the Government. They are the reality on the ground. So Zimbabwe must brace for what is to come. Together we conquer. We have gone through harder times before so this one we will conquer together. Beware of those who will want to take advantage of the pending troubles as a campaigning tool. Zimbabwe united will never be divided.