An increasingly acrimonious dispute between opposition MDC party leader Tsvangirai and Mugabe over control of key ministries and other top posts in a new unity government outlined under the power-sharing deal has left the pact on the brink of collapse.
Marathon talks chaired by South African President Kgalema Mothlanthe last Monday ended with no progress on the power-sharing deal and the MDC says a regional summit scheduled for tomorrow in South Africa is unlikely to rescue the fragile pact.
(Xhead) Wait-and-see stance
As prospects for growth lie mired in political uncertainty, edgy industrialists and other economic players have adopted a wait-and-see stance, amid fears that local industry and other sectors would not survive another few months if no solution was found soon to the country's political problems.
The Confederation of Zimbabwe Industries (CZI), an umbrella body of the country's manufacturing sector, said some companies were delaying opening their factories for the New Year while others had indicated that they would remain closed and concentrate on clearing stocks already produced.
The situation is quite dire . . . capacity utilisation is way below 10 percent. In fact, it is ranging between zero and five percent, CZI president Kumbirayi Katsande said.
A snap survey by The Zimbabwean on Sunday showed that most factories in the capital Harare and the second largest city of Bulawayo remained closed, a week after they were supposed to open following the traditional Christmas shutdown.
A leading manufacturer of roofing material and piping products has told workers at its plants in Harare and Bulawayo to report for duty in early March – only to check if there is any new work to be done.
Only the sales department is currently operating while the maintenance guys are expected mid-February. The rest of the staff have been told to come to work in March and, who knows, they could be told to go back home because there is no new work, a senior manager at the company said.
(Xhead) Factories turned into warehouses
Other industrial concerns are said to be pursuing the option of closing their factories and turning them into warehouses for stocking goods imported from South Africa.
That way they would save on the cost of labour and machinery while maintaining their profit margins.
There is that danger that we are all going to turn into traders, said Katsande, adding that the CZI was continuing to make representations to all the relevant authorities for possible ways of solving the problems facing industry.
The economic climate is expected to remain bleak for the foreseeable future as long as there is no real shift of political power.
The major donor nations are not going to support any government that has a strong ZANU PF presence as is implicit in the SADC-brokered agreement, said University of Zimbabwe business studies lecturer Tony Hawkins.
He warned that most foreign investors would most likely wait in the wings in the short- to medium-term while surveying political developments in Zimbabwe.
But industry is not the only sector numbed by Zimbabwe's political paralysis.
(Xhead) Mining, education under threat
Tremors from the political bickering between Mugabe and Tsvangirai are threatening to swallow the mining sector and deal a final blow to the comatose education sector.
Mining companies, including the key gold producers, are in a state of limbo, with most mines closed and undergoing care and maintenance work.
The official line by the bosses is that we have closed because of poor mineral prices but unofficially they say they are under instructions from their boards to suspend activities while monitoring political developments in the country, said a foreman at Trojan Mine in Bindura.
A subsidiary of Pan-African mining conglomerate Mwana Africa, Trojan suspended operations last November due to low levels of production and the unfavourable exchange rate of the United States dollar in the hyper-inflationary Zimbabwe environment.
There are no signs the exchange rate regime is going to improve any time soon.
To underline the business sector's jitters, the parallel market rate this week slipped from about Z$1.5 trillion per US dollar on Monday to Z$10 trillion to the American greenback by Wednesday, a staggering 80 percent depreciation in just three days.
There are no prospects that public schools would open this year while spiraling charges at private institutions would deny most children the right to education.
Some private schools have raised their fees from about US$300 last term to between US$800 and US$1 000 this year in a move seen as an attempt to raise entry barriers in the face of an influx of parents running away from the public schools.
Inflation, officially estimated at 231 million percent as of last July but independent analysts say the figure could be anything in the trillions, is also expected to remain the number one symptom of Zimbabwe's political impasse.
Post published in: Agriculture