As hopes for Zimbabwe dim, Francistown feels the pinch
Lesedi Kegorogile | Friday December 14, 2018 12:58
Zimbabweans and some Batswana in the city sang, whistled and danced in a massive shout of relief, joy and hope.From the early 2000s Mugabe had presided over Zimbabwe’s spectacular economic downfall that left the country swimming in a foreign debt of over $7 billion, 200% more than its GDP. Zimbabwe’s unemployment rate is currently at 90%.
There was widespread enthusiasm that Emmerson Mnangagwa, who controversially took over from Mugabe, would bring comprehensive reforms that would address the Zimbabwean economic crisis.
Francistown is near Bulawayo and is home to a host of Zimbabweans who have fled economic hardships in their country.
Mnangagwa, who with the assistance of the military orchestrated the downfall of Mugabe, was sworn in on an interim basis after Mugabe stepped down. Months later he would win the controversial presidential elections against Nelson Chamisa of the MDC.
When he toppled Mugabe the man nicknamed, ‘The Crocodile’ promised that the government would come up with radical economic reforms to take Zimbabwe out of the woods.
However, one year since Mnangagwa took over Zimbabwe is yet to find a recovery path. The cost of living has not gone down and the price of most basic needs has spiralled out of control.
According to media reports, prices of basic commodities such as mealie-meal, meat, soap, toiletries, rice, sugar and vegetables have significantly increased due to a currency crisis fuelled by foreign currency shortages.
Prices of various basic commodities have reportedly gone up by around 50%. The increase in prices was also attributed to monetary and fiscal rules introduced last month by the reserve bank.
The rules include a tax imposed on money transfers as well as separation of cash dollars and foreign inflows from bond notes and electronic dollars, which have caused the collapse of the surrogate currency on the black market. Some shops have even closed as a result of shortage of currency.
The lack of recovery of the Zimbabwean economy is a bitter pill to swallow for Francistowners. It was anticipated that Mnangagwa’s rise would help improve business linkages between Botswana and Zimbabwe in the process helping boost the economy of Francistown, which has been on a decline for over a decade when the Zimbabwean economy started falling uncontrollably.
The situation was compounded by the closure of Tati Nickel Mining Company in October 2016, which resulted in thousands of direct, and indirect job losses.
There was even hope that should Zimbabwe’s economic revival gain momentum, it would help bring to an end the surge in commercial sex and crime involving some Zimbabweans residing in Francistown.
Some Zimbabweans have turned into crime in a bid to survive. The government of Botswana also spends millions on an annual basis sending Zimbabwean illegal immigrants back to their country. Over 3,000 cases of sexually transmitted infections amongst them HIV/AIDS are registered every quarter in Francistown, which is a concern to authorities given that the city’s population is around 100,000.
Because of its connection to the A1, Francistown is viewed as strategically located to give market access to businesses operating within Southern African Development Community (SADC) and beyond.
That is why it was widely thought that should economic activity in Zimbabwe improve it would help boost the A1 road, which has not been so busy due to the collapse of the former’s economy.
The A1 highway is a road that runs from the Zimbabwean border near Ramokgwebana through Francistown and Gaborone, the capital city of Botswana, to Ramatlabama at the border with South Africa.
Crossing the Ramokgwebana River into Zimbabwe, it continues as the A7 to Bulawayo. On the South African end it continues as the N18 to Mahikeng.
Francistown deputy mayor, Godisang Radisigo this week said that he was disappointed by the turn of events in Zimbabwe. He emphasised that the economic revival of Francistown hinges on the economic fortunes of Zimbabwe.
“Our hope was that by now the transformation of the Zimbabwean economy would have started to take shape. Francistown has the potential to become a transport and logistics hub for traders who want to transport their products (to) across SADC countries and beyond. But if the Zimbabwean economy is not fully functional turning Francistown into a transport and logistics hub will always remain an illusion,” he said. He also sees the revival of the Zimbabwean economy as one major route that can help to facilitate skills transfer and joint venture partnerships between Botswana and Zimbabwe firms as well as those from other SADC countries.
Currently timber and steel companies with Zimbabwean shareholding have invested over P139 million in Botswana and have a turnover over P390 million. The companies have created more than 400 permanent jobs to Batswana. Some of them are located in Francistown.
Radisigo opines that the Botswana government and by extension SADC should move swiftly and support Zimbabwe’s transformation agenda both financially and through advice on strategic policy matters.
“A better Zimbabwe is good for Botswana particularly the economy of Francistown. As a country we should explore all possibilities to ensure that Zimbabwe’s transformation agenda becomes a reality,” he said.
Some years ago Botswana advanced Zimbabwe a P500 million total in a bid to caution the latter’s economy. The move was taken because it was thought that the total collapse of the Zimbabwean economy would ghastly have repercussions on Botswana, particularly Francistown.
In the 1990s the Francistown City Council authorities (FCC) also reserved large tracks of land at the Francistown Dumela Industrial Area for industries that wanted to set up in the city mostly from Zimbabwe in a bid to diversify Botswana’s economy. The move best highlighted the importance of the economy of Zimbabwe to Francistown.
The economic collapse of Zimbabwe has resulted in the land remaining undeveloped for years. “We still hope that things will be fine in Zimbabwe and this will boost the appetite of some investors to develop the land for various activities,” Radisigo chips in. The deputy mayor is also optimistic that Zimbabwe’s economic revival will soon gain traction because the international community has pledged to help the latter (revive its economy).
The International Monetary Fund and United Kingdom recently revealed that they would assist Zimbabwe to come up with economic policy frameworks to help revive the country’s fortunes. Investors have also showed willingness to invest in Zimbabwe, a country that was in the past known for its strong education, mining and agricultural sectors.
Even the Francistown Chinese retailers and supporting businesses who have cushioned the city’s economy from total collapse are feeling the brunt of the current economic woes in Zimbabwe. The manager of Neo Trading, Ronglei Xu said, “Commercial activity in the city has literally gone down. Very few Zimbabweans are now coming to Botswana because of currency problems in their country”. Zimbabweans purchase goods in bulk from Chinese shops to resell in their country. Until recently the Haskins Street was a hive of activity with Ramokgwebana-bound mini trucks and combis carrying load after load, a sign that business was brisk and thriving in the Chinese shops.
Chinese shops employ a host of Batswana and Xu fears that they may lose their jobs if the situation in Zimbabwe persists. More job losses in Francistown coupled with lack of recovery of the city’s economy might spell disaster for the city’s economy. Xu says that there is need to find a long-term solution to the economic woes in Zimbabwe to ensure that the country does not suffer constant economic dislocation, which inevitably affects Francistown.
Gift Moyo who runs a business that transports goods from Francistown to Zimbabwe also said that his business has severely plummeted owing to currency problems in his home country.
He added that every aspect of the economy is not doing well and the situation has literally affected every household in Zimbabwe.
“It will take time for things to change, but I am optimistic that the economy of the country will be revived. The international community and SADC member states have shown confidence towards the current regime.
“Given their full backing I am optimistic that things will be better. SADC leaders need to intensely dialogue on how they can help Zimbabwe emerge from economic woes. Zimbabwe is important for the economy of the region,” he said. Another transport operator Qinisile Sibanda, 38, who says that in recent months he has not made any profit to write home about owing to less economic trade among Zimbabwean traders who buy their goods in Francistown, holds an opinion that Zimbabwe needs the support of SADC and other African countries to regain its status as the bread basket of Africa.
Economist Keith Jefferis of Econsult Botswana notes that given the necessary support the new Zimbabwe Minister of Finance Mthuli Ncube could turn things around.
The 55-year-old respected Ncube is a former chief economist and vice president at the African Development Bank. “I am very familiar with him. He is very smart and very qualified. But he needs strong political backing in order to solve the problems of the country,” he says.
Although he is of the view that the problems in Zimbabwe are internal he averred that a cash injection by SADC or external stakeholders can help jumpstart the Zimbabwean economy, but for a provisional period.