Just over a year ago, Zimbabwe had the world’s worst modern-day hyperinflation and the national currency was worthless
Streets in central Harare were lined with black-market traders exchanging huge wads of Zimbabwean dollars for US dollars or South Africa rand.
One trader, who did so well illegally dealing in foreign exchange he could afford to take a second wife, has taken up his old job as a taxi driver.
“Life has become so difficult and there is no meaningful business to sustain my life. In the past, no matter how difficult it was, you could always get some money, but not now. Raising a dollar has become hard labour,” said Derick Chiwapura who traded foreign exchange at a Harare shopping mall.
Today, shops in the capital are fully stocked with goods which anyone can buy as long as they pay in US dollars. Zimbabwe’s government allowed the use of multiple currencies in early 2009, effectively making the dollar the official currency.
Harare’s streets are markedly cleaner than they were six months ago, grocery shops have sprung up all over the capital – offering goods at prices comparable to neighbouring South Africa – and there are more new vehicles on the roads.
But much-needed investment from abroad remains absent and the country’s stock exchange has seen foreign investors retreat after the introduction of regulations calling for foreign-owned companies to transfer a majority stake to Zimbabweans.
Zimbabwe moved to implement the Indigenisation and Economic Empowerment Act that requires foreign firms to sell a 51 percent stake to local blacks at the end of January.
“The foreigners are sniffing around. You can see that from the full hotels but nothing will happen until the economy picks up,” said one banker in Harare.
Zimbabwe’s power-sharing government, set up by President Robert Mugabe and his rival Morgan Tsvangirai, now the country’s prime minister, has estimated around $10bn is needed to repair the economy.
Foreign investors are also reluctant to pledge funds without faster political reform. Mugabe’s ZANU-PF party and Tsvangirai’s MDC continue to bicker over the pace of reforms and appointments of senior state officials.
One area where change is yet to happen is the country’s state media. State-owned Zimbabwe Broadcasting Corporation recently ran Mugabe’s speech on the occasion of the country’s 30th independence anniversary as the main news item – for four days in a row.
And every reference to him on state television is prefixed with: “His Excellency, The President, Head of Government and Commander-in-chief of the Zimbabwe Defence Force”.
Bankers and the country’s stock exchange say the economy can only recover if there is significant foreign investment but the controversial empowerment regulations have spooked investors.
“We are hearing that the regulations are going to be reviewed but the unfortunate thing is, investors don’t wait for you. They will go elsewhere,” said Zimbabwe Stock Exchange Chief Executive Officer Emmanuel Munyukwi.
At the height of Zimbabwe’s economic crisis in 2008, the ZSE experienced a boom as many Zimbabweans saw the exchange as their only hedge against runaway inflation.
Munyukwi said this was a nightmare for the exchange.
“When you start seeing vendors in the street playing the stock market, you know something is wrong. We were seeing guys selling bananas in the stock market foyer checking stock prices”.
For many Zimbabweans, not much has changed in the past year.
Unemployment remains above 80 percent, state employees are paid no more than $150 a month and electricity cuts occur daily.
“Don’t worry gentlemen, we will start the generator and set you up quickly,” a Harare restaurant owner told a group of customers who arrived during a power cut.