Tourism is a forgotten sector in Zimbabwe. Treated as a step child. Despite its forgotten status it contributed 6% to GDP.
This is the same as Mining, but requires far less capital.
In good years Tourism contributes 10% to GDP. 2% more than agriculture.
Zim tourism is almost exclusively driven by domestic clients & diaspora. Very little is being done to attract international visitors who tend to spend more.
This is a snapshot of room occupancy. The number of rooms has remained stagnant for ten years since 2011.
The policy problem in my view is moral hazard. In cabinet & civil service you have full time farmers who go out of their way to direct attention & spending towards Agric. Mining is rot with corruption hence its visibility.
A study funded by USAID identified the policy problem
With little effort & almost exclusively driven by Zimbabweans home & abroad tourism GDP was $1.3bn. Slightly bigger than mining & 2% lower than agriculture.
International visitors contribution is only 16%.
Globally, 1 in every 4 new jobs is in the travel & tourism sector.
In 1990, Zim GDP was larger than Kenya.
Today Kenya T&T is a $7.9bn sector, 15.9% of the country’s exports.
This presents the opportunity of tourism in Zimbabwe
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1/ Back in 2017, today. People protested against President Trump. It continued throughout the weekend. Their message was simple enough. It even had a hashtag. “He is not my president”.
2/
Suppose others too were to protest today with the same hashtag #HeIsNotMyPresident. How will the media & world react? This is not a call of violence of any kind. But peaceful protest as were witnessed four years ago.
3/ For a president that was predicted to be kicked out of office before his term was done, President Trump did well. More than well infact. History will record his many wins.
Reducing the tax rate from 36% to 21%.USA oil independent. Peace in the Middle East. No new war started
A most egregious & patently false allegation was made by Zanu PF as it pertains to Old Mutual Implied Rate ( OMIR). Old Mutual was accused by Zanu PF of fueling the parallel market.
Zanu PF got its wish & OM was suspended.
2/ At the time Nick Mangwana GOZ perm sec of information called OM and other dual listed firms “ fake counters”.
Chinamasa speaking on behalf of Zanu PF said “ZSE should compulsorily de-list”.
In other words. Fake counters must be compulsorily delisted.
Duly ZSE delisted OM
3/ George Charamba the President’s spokesperson & former advisor to the President Chris Mutsvangwa were even more rabid. Chris alleged the OMIR & Ecocash were staging a “ coup”.
For Charamba it was an “illicit”, “outlaw” activity becoming a security threat for the state.
1/
This is a good piece in trying to uncover a dubious & scandalous transaction. But more could have been investigated and cross checked. Eg ZMDC mines only Jena is producing and it’s less than 50kgs a month & not 300kgs as the article alleges.
2/
Secondly it claims the issue of sanctions against Kuda Tagwireyi is perhaps the reason why this hocus pocus is happening. This is not true & I will explain later.
3/ Thirdly like many news items it too fails to verify information that is parroted by management & others. Eg the deal amounts & said capital raises of $1bn. This is all a ruse. Caledonia that produces 60k ounces of gold is valued at US$200m, has millions of ounces in reserves
Economists identify threats & opportunities. They’re neither optimist nor pessimists. Their job doesn’t require them to be. Threats & opportunities often become clear when data, patterns & trends are presented.
2/ This is why in America every month the Job report is dissected & nibbled down to its bare elements. No analyst is derided nor politically attacked. In Zim, the political environment has meant many great Economists not participating fully. This is a tragedy & loss to Zim.
3/
2021 is a challenging year globally & in particular Zim. Zim economy will not grow this year but will enter year 3 of its economic depression.
While GOZ estimated the economy declined by 4% in 2019 & estimating 8% decline in 2020. World Bank have released 2019 actuals
According to the World Bank/IMF data remittances into Zim averaged US$1.8bn annually over the last decade. This translates to between 10-14% of GDP.
Remittances over the decade were equivalent (on average)to 60% of GOZ tax revenues (US$3bn).
2/ Over the same period FDI was US$400m p.a
Humanitarian aid was US$500m p.a
Total bank deposits during Dollarisation were US$4bn. Private sector credit was US$3.8bn.
The absolute annual remittances of US$1.8bn & as a % of GDP show how pivotal & influential a variable it is.
3/ The US$1.8bn is unencumbered when it enters Zim. By unencumbered, it means free money without any requisite strings attached to it. For example Zim exports US$5bn, of which 80% is cost& expenses. 20% profit is unencumbered.
The paradox can be stated as thus; The single most influential variable in the Zim economy is diaspora remittances, yet it’s the least researched, misunderstood & almost forgotten sub-sector.
2/ While GOZ in its incompetence can be easily forgiven, one wonders how the many multilateral organizations like WB, IMF ADB UNDP, DFID, USAID including NGO’s have played a part in the almost nonexistent , inconsistent and generally forgotten sub-sector
3/ Certainly from an Economics perspective, nothing requires more study and understanding than remittances. After 20 years of a growing diaspora, surely this is an area that demands careful policy direction since it has both opportunities & threats to an economy.