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Happi Zengeni @happ_zenge
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November 14, 1997 - #Thread

What was the state of the economy?
-By the beginning of November 1997, nearly 100 job actions had taken place in the country due to rising costs of food, business closures and a shrinking fiscus.
Turnall and Cottco listed on the Stock Exchange
And the background?

Inflation increased from 11.6% in 1985 to 32.6% in 1996, falling to 25% by 1997. Real wages had fallen by nearly 25% and employment growth declined from an index of 2.4 to 1.5. Poverty levels had increased from 40.4% in 1990/91 to 63% in 1996.
Some positive developments in 1997

McDonalds, announced they were searching for a local partner to build their first restaurant in Zimbabwe. KFC had just opened for the first time in Bulawayo. The Westgate Mall in Harare was opened and the Joina Centre project begun
And then someone wrote a letter! Not on Nov 6 as what happened last year, but on Nov 5. Clare Short wrote to then Agric Minister Kumbirai Kangai saying that Britain does not have an obligation to fund land purchases in Zimbabwe in spite of an earlier undertaking @tambarara
But the letter did not inform the events of Nov 14. It just influenced Govt's strategy or lack thereof and anti-west ideology, for the two decades which came after.
Long story short; The Zimbabwe dollar fell by 71,5% against the greenback, while the stock market crashed by 46% as investors rushed for the United States dollar. For most of the afternoon it traded between Z$19 and Z$25 and up to Z$45 to the British pound. @FinxZim
the RBZ intervened with a US$15 million forex injection to shore up the local currency. The day ended with the Z$ trading at between Z$14 to Z$18 to the US dollar. This was, at the time, the lowest value of the Z$ ever recorded.
The decline was blamed on the continued uncertainty over the payouts, the designation of over 1,500 commercial farms for forced acquisition, news of increased taxes and thus less disposable consumer income, and the lack of progress on balance of payment support for ESAP.
And there was the Herald cartoon
After the crash, the RBZ forced all corporates to liquidate their FCAs by 21 November 1997 in a vain attempt to push at least US$160 million onto the local market and further stabilise the Zimdollar!!! @tambarara @FinxZim
It is this economic crisis that led to the riots of 1998, and which a year later through the trade unions, resulted in the birth of @mdczimbabwe
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