HomeBusinessLes Propheties: A peep into the year ahead

Les Propheties: A peep into the year ahead

FRENCH apothecary and astrologer Michel de Nostredame, commonly referred to as Nostradamus, is best known for his book Les Propheties, a collection of 942 poetic quatrains claiming to predict future events.

By Kuda Chideme

But, like horoscopes, his predictions tend to be vaguely worded, and therefore open to the reader’s interpretations and biases.

In reality, most of Nostradamus’ prophecies are poorly translated — and vaguely worded enough to encourage tons of speculation.

The team at the StandardBusiness decided to have a go at prophecy, a practice which has become a lucrative trade for many (dis)reputable seers of modern times.

Unfortunately, we do not speak in tongues or possess any mystical powers; neither do we own a magical crystal ball.

Our predictions, however, are informed by the invaluable insights we get through our interaction with policymakers, business leaders, legislators from across the board as well as ordinary people on the streets.

Currency crisis

With US dollars in short supply and no currency of its own, Zimbabwe will continue to undergo a severe currency crisis.

Treasury and central bank officials spent the greater part of last year trying to convince the market that the surrogate currency, the bond note, and electronic dollars were at par with the greenback though reality on the ground spoke otherwise.

The bond note has lost value and is worth a small fraction of the US dollar. So, for as long as government maintains this myth and refuses to let the bond note float freely, the currency crisis will not end.

We predict that in 2019 the parallel market will thrive as demand for the US dollar will push the exchange rate higher and, as this happens, retailers will increasingly start pricing their goods in US dollars in order to cushion themselves against value erosion.

In response, government will take a combative stance, arresting illegal currency traders and shop owners. This will not help the situation, but will only result in shops failing to restock, triggering shortages.

In short, nothing short of a bailout package in the region of $2 billion will avert the situation and the economy will continue to hurtle downslope at breakneck speed.

Labour unrest

What is safely predictable is that prices of goods and services will increase at a faster pace than wages are adjusted and as a result, the cost of living will continue to rise beyond the reach of many.

Tension is already simmering at workplaces and signs of a full- blown government shutdown are already beginning to show. Teachers have declared their intention to join striking doctors who downed their tools a month ago demanding US dollar-denominated salaries and general improvement in their conditions of service.

Because life is increasingly becoming difficult for ordinary workers, it is easy to predict calls for industrial action throughout the civil service will grow even louder.

Poor agricultural season

The start of the 2018-19 rainfall season has been delayed and rains have been erratic so far. Weather forecasts predict that the country will experience below normal rainfall with drought conditions expected.

As a result, farm activities such as land preparation, planting and casual labour opportunities will be adversely affected.

The country will, however, have enough maize to sustain itself from carryover stocks from the previous season’s bumper harvest. Tobacco output will not be anywhere near the record 237 million kilograms range produced in 2018.

This will have a direct impact on the stability of the larger economy given that exports of the golden leaf come only second to gold in terms foreign currency receipts.

In 2017 tobacco accounted for a quarter of Zimbabwe’s $3,8 billion total export earnings, it is also one of the largest employers in the country where formal employment is scarce.

Missing the golden opportunity

Gold prices on the international markets are expected to enjoy a sustained bullish run as the ongoing trade war between China and the US fuels uncertainty across global markets and sends stocks plunging.

Zimbabwe, however, will miss out on this golden opportunity as output will register a marked decline. Up until last October, gold output had been on an impressive growth trajectory until foreign currency shortages reversed the trend.

In 2019 most mines will continue to face viability challenges characterised by widespread shortages of inputs and sharp increases in operating costs.
Several large-scale mines will be mothballed.

Local companies to cut back on capital investment
With foreign currency in short supply, companies that are reliant on imported raw materials will struggle to stay afloat. There will be blood on the floor literally as many companies will fold and the few warriors that will survive this invertible apocalypse will scale back operations leading to rapid informalisation and vending.

In the run-up to the elections, local firms polled by this paper indicated that they would be holding back plans to invest in expansion projects as the outlook was unclear.

Elections have come and gone and the outlook at this point is that confidence is at its lowest and it will sink even further.

Investors will hold off FDI

In 2018 Zimbabwe attracted a paltry $470 million in foreign direct investment (FDI). Now, with local players showing little to no confidence that the economy will turn around, foreign players are certainly going to keep at bay, save for the few that have an appetite for high-risk portfolios. As it is, foreign investors active in the country are finding it difficult to repatriate dividends.

This desperation for FDI will expose the country to speculators and dubious characters posing as investors. Meanwhile, President Emmerson Mnangagwa’s hard-pressed government will clutch at straws and go on another crusade of signing meaningless “mega deals” much to the excitement of state media.

In Nostradamus, Bibliomancer: The Man, the Myth, the Truth, biographer Peter Lemesurier concludes that Nostradamus “believed that history repeats itself” and used the technique of projecting past events onto the future in order to make realistic-sounding claims. 

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