An analyst writing for NewZWire said the Zimbabwean economy will take a knock in these 8 areas because of the COVID-19 Pandemic.
1. Knock on tourism
Flight cancellations, travel bans and lockdowns mean people are not traveling, and will not be travelling for a long time to come.
The World Travel and Tourism Council says it could take up to 10 months before the industry starts to recover.
By the start of March, flights into the RGM International Airport had fallen by 30%, according to Evans Siziba, Head of Immigration at the Civil Aviation Authority of Zimbabwe. But this was before lockdowns became worse around the world, with many countries completely shutting down their borders and banning any travel.
According to Arnold Musonza, head of the Hospitality Association of Zimbabwe in Victoria Falls, some operators in the country’s main resort have lost all their bookings.
Many of Zimbabwe’s major source markets – the UK and Ireland, the United States, Japan, Germany, France, and China – are in lockdown. The hunting season, a lucrative time for the country when many American hunters arrive, is supposed to open in April, but bookings have been cancelled, players say.
Emirates has cancelled flights into Zimbabwe and Zambia until May 20.
While Zimbabwe’s travel restrictions are not as tough as those of other neighbouring countries, the country is only part of an interlinked destination for tourists, and stricter travel bans in the region will keep visitors away.
This means Zimbabwe will lose out on a large chunk of the US$1 billion that it earns from the 2.2 million annual visitors to the country.
2. Remittances down
Many households in Zimbabwe live on Diaspora remittances.
According to Zimstat’s Inter-Censal Demographic Survey (ICDS) of 2017, the majority of emigrants sent between US$101 to US$500 to Zimbabwe during the year. Some 52% of the surveyed emigrants reported sending money home.
The survey found 19% of all Zimbabwean households were “migrant households”, meaning they had at least one family member working outside the country.
Zimbabweans abroad sent home a total of US$635.4 million in 2019, according to RBZ data. This was up 2.6% from 2018.
It will be a lot harder to send money home this year, due to the fall of currencies of countries hosting large parts of the Zimbabwean Diaspora. As those currencies fall, Zimbabweans there will need to spend more to maintain the same amount of money they were sending home.
For example, in March 2019, a Zimbabwean in the UK needed £76 British pounds to send US$100 home. Now, after the pound fell to a 35-year low, that Zimbabwean now needs £86 to send the same amount of money.
For a Zimbabwean in South Africa, where they needed R1,450 to send home an amount of US$100 to their family back home, they now need as much as R1,720. The rand has fallen since the outbreak, touching its lowest ever levels.
With less remittances, the economy will have even lower consumer spending, while there will be less foreign currency for the country.
3. Even lower FDI
Zimbabwe was already facing a sharp fall in foreign investment inflows. In 2019, FDI fell 60% from US$717.1 million in 2018 to US$259 million. Portfolio investments, a class of investments that includes assets such as shares, collapsed from US$54.7 million in 2018 to US$3.7 million in 2019.
This decline will fall even faster, as even those investors that were still braving Zimbabwe’s turbulence are likely to halt any plans to invest in the country, due to the uncertainty brought by the virus.
4. Delayed Projects
Zimbabwe is going to see a delay in infrastructure projects, many of them supported by China.
“In our case, we have seen key bilateral projects in many sectors, most notably in transport and infrastructures, either being slowed down or coming to a complete halt,” Mnangagwa said on Tuesday.
One such project is the project to expand the Hwange power station. The US$1.4 billion project, being undertaken by China’s Sinohydro, is meant to add 600MW of power to the national grid.
However, Energy Minister Fortune Chasi says the project has been delayed as Chinese contractors have been unable to return to Zimbabwe.
Forbes Chanakira, site manager, says the plan was to start commissioning Unit 7 of the project in April next year. However, work has stalled due to delays in the shipment of essential materials for construction.
Other Chinese-funded projects likely to slow down include the RGM International airport expansion, as well as the new Parliament building.
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