Calls grow to reopen parts of Zimbabwe’s crisis-ridden economy

Despite health risks from coronavirus, economists say Zimbabwe cannot afford to idle crucial industries.

Zimbabwe coronavirus 2
Zimbabwe's lockdown could have 'disastrous consequences' for the economy, say experts, but others warn against the potential human toll of reopening the economy too soon [File: Philimon Bulawayo/Reuters]

Harare, Zimbabwe- A tall, medium build security guard stands behind a large steel gate at Boka Tobacco Auction Floors on the outskirts of Harare, his face partially covered by a white surgical mask and his hands encased in white surgical gloves.

Al Jazeera observes from the safety of a car as he dispenses sanitising gel on the palms of people seeking entry to the premises he is watching over. After diligent vetting, he allows two people and a white land rover pick-up truck to pass through the gate.

Zimbabwe is still in the midst of lockdown to stem the spread of coronavirus. Though the country has confirmed only 28 cases of COVID-19 and four deaths from the disease, according to Johns Hopkins University, a ravaged economy and crippled healthcare system make it woefully ill-equipped to gauge, let alone manage the healthcare crisis.

The government of President Emmerson Mnangagwa has extended stay-at-home measures until at least May 3. But the virus causing untold suffering and death around the world is not the government’s only fear.

With an economic crisis characterised by foreign currency shortages, deeply eroded disposable incomes, dwindling exports, high unemployment, low manufacturing output and a currency that is rapidly losing value, some economists say Zimbabwe simply cannot afford to idle some of its money-making industries.

“The economy is coming from a background of economic decline in the prior year of around 7 percent by government estimates and above 10 percent by other estimates and general low production,” Harare-based independent economist Victor Bhoroma told Al Jazeera by phone.

“Against such a background, the lockdown will have disastrous consequences for the economy.”

Despite the health risks, Mnangagwa is extending lockdown exemptions to key foreign exchange earning industries, including tobacco and mining.

Zimbabwe coronavirus
A city health worker in Harare prepares to disinfect a bus during a national lockdown to limit the spread of COVID-19 [File: Philimon Bulawayo/Reuters]

Modifications to manage health risks

Zimbabwe exported $507m worth of tobacco and $2.8bn worth of minerals in 2019, according to government figures. 

To allow this crucial trade to continue in the age of COVID-19, some modifications are being introduced in an attempt to limit public health risks.

Boka Tobacco, one of the few companies in the country allowed to open for business, is being made to follow strict World Health Organization’s COVID-19 guidelines.

“We are open to minimal staff only for preparation purposes. No visitors or farmers allowed at this stage,” Chido Nyakudya, the chief executive of Boka Tobacco Auction told Al Jazeera.

Farmers are also being forced to change routines as well. Rather than travel to Harare with their harvests, tobacco growers are being instructed to deliver their yields to provincial depots where they are asked to observe stringent social distancing rules.

Still, auctions to sell tobacco, which were scheduled to resume on Wednesday, have yet to commence.

“They [the government] said we should be ready to start selling on short notice,” Tobacco Industry Marketing Board chairman Pat Devenish told Al Jazeera by phone. “All the tobacco auctions are ready. The industry has also put in place measures to limit transmission such as hand sanitising and social distancing. This is what we have been working on for the past three weeks.”

Zimbabwe Tobacco Association agriculture manager Casper Mlambo told Al Jazeera farmers are also anxious to get business moving again.

“We welcome the plan to open the auctions,” said Mlambo. “Farmers obviously want money to cover various costs associated with the business and to survive.”

Economic and health risks

Zimbabwe was already in the throes of a deep economic crisis that had sorely compromised its healthcare system before the coronavirus pandemic struck – a back footing that will make it that much harder for sectors of the economy to recover once the crisis ebbs.

Bhoroma says the hardest hit industries will be tourism – which is customer-facing – and manufacturing, which relies on imported raw materials that cannot get through due to COVID-19 border closures.

The Zimbabwe National Chamber of Commerce (ZNCC) estimates that 25 percent of the country’s formal jobs and 75 percent of informal jobs are at risk from COVID-19 containment measures.

“Workforce will be made redundant as some businesses will not be able to adapt to the effects of Covid-19,” the ZNCC wrote. “If the total lockdown is extended without resorting to partial lockdown, some of the leisure and tourism operators might completely collapse.”

The Confederation of Zimbabwe Industries (CZI), a trade body that represents manufacturers, has warned that 82 percent of the country’s companies can only fund salaries for a month under lockdown, and is calling on the government to relax stay-at-home orders to allow firms to resume limited operations.

“In Europe, they have allowed production to continue including that of non-essential goods except in Italy and Spain,” the CZI said.

President Mnangagwa has tried to assure Zimbabwean businesses that he hears their concerns.

“Government is acutely aware of the need to keep the economy running albeit at subdued levels,” he said in a televised speech on Sunday.

But Zimbabwe still faces deep structural challenges, including a 90 percent unemployment rate that has driven most people into the informal economy, leaving many bereft of income during the lockdown.

“Zimbabwe cannot afford to lock down even for a week,” Bhoroma said.

But some analysts are warning against reopening even parts of the economy too soon.

“Zimbabwe’s is just a big tragedy,” political analyst and human rights activist Rashwheat Mukundu told Al Jazeera. “Our economy was already on its knees. Our health sector was also a mess. It’s a double tragedy.”

Should COVID-19 infections rise, Mukundu warned that Zimbabwe’s cash-strapped government simply cannot count on wealthier foreign countries to help.

“Government will not be able to deal with an outbreak should cases rise,” he said. “The begging bowl will not fill up anytime soon. This is because everyone is dealing with the same problem in their own countries.”

Source: Al Jazeera