ZIMBABWE’S disputed election results are dampening economic growth prospects, with the country risking continued isolation and an escalation of brain drain, which could hurt companies, the business sector has said.
The country, which held its elections last week, is projecting real gross domestic product (GDP) to grow by 5,3% this year, a figure which was revised upwards from 3,2% buoyed by agriculture, mining, and services.
The businesses had hoped that the outcome of last week’s elections would be accepted by all contesting political parties, but the opposition has rejected official results.
Business leaders now fear that disputes will affect growth, further destabilising the exchange rate and triggering a surge in inflation.
The Zimbabwe Electoral Commission (Zec) proclaimed incumbent, President Emmerson Mnangagwa winner.
But Citizens Coalition for Change (CCC) leader Nelson Chamisa has disputed the results, saying polls were flawed and not free and fair.
Some observer missions have also said the polls’ credibility was in doubt.
Business leaders, who spoke to the Zimbabwe Independent this week, called on political parties to resolve the dispute before it affects the economy.
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“If we do not have the necessary support, both internally and externally, we can’t achieve those GDP growth aspirations on our own,” Association for Business in Zimbabwe chief executive officer Victor Nyoni said.
“So, at the moment we are holding our breath to see what happens with the exchange rate and the economy. But we all hope that authorities resolve this sooner so that the economy does not absorb shocks emanating from the dispute.
“When elections are disputed, it means you are not trusted by anyone again. When you are not trusted by the world, it compromises the whole business environment.
“Thus stability is not guaranteed and there should be economic policies that are adopted and directed to focus the problems that are at hand,” he added.
Nyoni said the country had also been experiencing brain drain as the young and professionals are leaving the health, engineering and other key sectors of the economy.
In the face of uncertainty caused by a disputed election, Nyoni said further brain drain was imminent, denting business confidence and operations.
He also warned of capital flights on the back of eroded confidence from global investors.
“Investors have always been interested in investing in an environment that is conducive for capital and that only happens where there is peace,” Nyoni said.
“When results are disputed it means peace is compromised. This scares away capital from any environment, and Zimbabwe is not an exemption.
“There is also an issue of country risk. No one wants to put money where people cannot speak or express themselves freely,” he said.
Confederation of Zimbabwe Industries president Kurai Matsheza could not be drawn into directly commenting on the impact of the disputed elections on the economy. However, he expressed scepticism on the stability of the exchange rate going forward.
“The exchange rate has been strengthening but on the auction system we have seen the softening of the Zimbabwe dollar for the past three or four auctions,” he said.
“Whilst those rates of depreciation are not alarming, it is the direction which we are worried about.
“We are still engaging our members, but once the new government takes office there are going to be more issues of engagement,” Matsheza said.
He said while power supply had improved, industry hoped that it would remain like that, adding that any contrary move would erode the ground that the industry had covered this year, bringing a different outcome altogether.
Confederation of Zimbabwe Retailers president Denford Mutashu said the dispute was slowing economic progress.
“The dispute is slowing down economic progress and political actors must put the interests of the country ahead of personal interests,” he said.
“Even at the Olympics there are winners and losers and maturity is accepting outcome of the race without fanning anxiety, violence and retrogression.”
Professional Business Association of Zimbabwe director Lucky Mlilo hoped that peace would prevail for the country to achieve its economic growth prospects.
“Everything is achieved by having peace in the country. We hope that the involved parties resolve this sooner so that we are able to continue without business disruptions. Stability is key for economic economic growth,” he said.
