Coronavirus and the Economy of Zimbabwe

In December 2019, Wuhan, Hubei province, one of China’s six megalopolises with a population of 14 million, became the centre of an outbreak of COVID-19, which the World Health Organization (WHO) declared a global pandemic on 11 March 2020. Countries have taken multiple and varied measures to mitigate against the spread of the pandemic virus, including prohibition of large gathering, social distancing and complete country lockdowns. Important economic and social events and activities have been cancelled or postponed indefinitely with significant job and revenue losses. On the sporting front, the Tokyo 2020 Olympics, the French Open as well as popular football leagues such as the English Premier league, the Spanish La Liga, the Bundesliga and Italy’s Serie were cancelled. Critical international conferences that include the 46 th G7 Summit which was scheduled for June 2020, in the United States, will now be held via video conference while the 36 th ASEAN Summit which was due to take place in April 2020 has been postponed indefinitely. At home, the 2020 Zimbabwe International Trade Fair (ZITF) and the Premier Soccer League matches were postponed also with significant direct and indirect losses and costs on revenue, jobs and potential investment. The country’s independence celebrations previously scheduled for April 18; a major event for the country since attainment of independence in 1980, were also cancelled.

As of 05 April 2020, there were 1,174,652 confirmed cases of COVID-19 globally including 64,400 deaths. Despite the early myth among many in Africa that the continent was going to be spared, the virus has already invaded the continent and its level of preparedness is still to be tested as the number of infections and deaths increase. The numbers for the continent had reached 8,293 confirmed cases, with 61 deaths as of the 5 th of April 2020. Zimbabwe is among the African countries with slow and low rates of infection and deaths since the beginning of the outbreak compared with other African countries that include South Africa with 1 585, Algeria with 1 300, Egypt with 985, Morocco with 919, Cameroon with 555 and Tunisia with 495 cases. The country had its first confirmed infections in March 2020 and since then, the number of confirmed infections is at 11. However, there are fears of inadequate preparedness for the country should the rate of infection accelerate. Already, there are 3 deaths from the pandemic. China, which accounts for at least five percent of Zimbabwe’s foreign trade has been hit hard while South Africa which accounts for at least 40 percent of the country’s trade is among the most affected African countries; escalating the fears on Zimbabwe with regard to both the spread of the virus and the magnitude of the potential negative trade shocks on the economy.

Several measures have been put in place globally to control and reduce the spread of the Coronavirus pandemic, ranging from travel restriction and compulsory testing and quarantining for inbound travellers; to complete closure of borders as well as banning of large gatherings and country lockdowns. The government of Zimbabwe instituted Statutory Instrument 77 of 2020 which introduced a blanket ban on large gatherings around recreational facilities such as night clubs, bars, beerhalls, movie houses, swimming pools, gymnasiums and sporting activities. The government also announced a 21-day national lockdown whose enforcement commenced on 30 March, 2020.

It is no doubt that the Coronavirus outbreak and the subsequent measures to mitigate against it are already impacting the global economy. The impact is channelled through the effects of reduced global incomes, trade, investment, productivity and exports. The World Health Organization has noted that the adverse effects of the pandemic are likely to be larger and magnified for the highly indebted, fragile and poor countries in the developing world, where measures such as country lockdowns and social distancing are difficult to implement and where such measures are likely to plunge the countries into further poverty. Zimbabwe cannot be spared from these challenges. This article seeks to assess the possible economic and social challenges of the Coronavirus pandemic on Zimbabwe’s economy, with special attention on its impact on trade, manufacturing, travel and tourism, the financial sector and the informal sector, including cross border trading, the micro to small and medium enterprises.

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Source: Holistic, Empirical and Applied Research Solutions (HEARS)

Holistic, Empirical and Applied Research Solutions (HEARS) is a specialist economic and development consulting firm based in Harare, Zimbabwe. For more comments, questions, partnerships and funding for more research like this, please email research@hears.co.zw We believe in free flow of information and you can republish our knowledge products for free, online or in print on condition that HEARS is acknowledged.