eBusiness Weekly
THE recently concluded World Economic Forum in Davos, Switzerland is another insight into the global challenges we face as a people and how we can address these challenges in a collaborative way that is sustainable and inclusive.
It is a festival of ideas and insights into challenges and opportunities at a global scale that is digested and dissected by global leaders in business, politics, regulators, opinion leaders etc. with the idea of sharpening ideas for global implementation.
Zimbabwe is not immune to global issues and of particular stand out is the recently publicised Global Risk Report of 2024. Its basically an insight of the risks that both public and private sector players face and potential challenges it can pose and suggestive ways to mitigate these.
Of particular interest and largely prevalent in Zimbabwe is risk around extreme weather events due to climate change, geopolitical tensions bringing about economic uncertainty and inflation.
Zimbabwe is currently going through the El Niño-induced normal to below normal rainfall pattern, which is an example of an extreme weather event due to climate change arising from many aspects, largely being global emissions leading to global warming.
This poses a threat to our food security particularly grain capacity thereby disrupting our food self-sustenance ability. This is a glaring example of a local phenomenon and needs to be addressed or mitigated on its impact.
Accelerated investment in alternative water bodies and well climate proof is the way to go. Both the central government and private players need to play a leading through direct funding in innovative agricultural technologies that mitigate limited rainfall impact or through incentive mechanisms to get private sector buy in on Agri-technology investment.
Tanganda Tea company is an example for a company that has taken cognisance of this risk and started investing in alternative sources such as dams, reservoirs and modern technologies such as high-technology precision irrigation.
Geo-political tensions taking place global have an inevitable effect of disrupting global supply chain which can have a ripple effect of shortages, inflationary shocks and economic downturn. This has been prevalent and has led to economic uncertainty.
Zimbabwe has experienced such cycles of potential food shortages, inflation, usual supply chain disruption and shortage threats on key commodities such as fertiliser, wheat, fuel etc.
Inflation has become a global threat to the extent that majority of central banks globally have attuned to a combative mode on their monetary policy stance through tightened (contractionary) monetary policy stance.
Zimbabwe yet to see the position on the monetary policy position in 2024, but most likely it will be a tight monetary policy in line with perceived global economic phenomenon with a bit of local economic prescriptions around our currency management framework following the promulgation of SI218 of 2023 that extended the multi-currency system.
Therefore, the monetary policy will inevitably buttress this at policy level.
On supply chain disruptions, Zimbabwe needs therefore to become self-sustainable in areas of ability due to the global nature of aspects such as shortages.
Capacitation of local industry that have a substitution effect must be prioritised. To some extent Zimbabwe has the capacity to produce its own fertiliser through companies like Sable Chemicals Ltd, Zimphos Ltd and Dorowa Minerals, to mention but a few.
Therefore, a deep introspect is called upon in the institutions of potential impact of the risks outlined above and in the Global Risk Report of 2024. Mitigatory measures need to be implemented and probably accelerated where it is possible to.
Malone Gwadu is an economist and he can be contacted on [email protected]
