Zim yet to feel economic impact of coronavirus

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RESERVE Bank of Zimbabwe (RBZ) governor John Mangudya, pictured, says the country is yet to experience any negative consequences on the economy due to the effects of the deadly coronavirus.

This comes as experts have warned that Zimbabwe, with its reliance on imports and dilapidated health system, is likely to suffer further economic decline due to the effects of coronavirus.

Speaking at a Daily News Breakfast Forum on the state of the economy last week, Mangudya said while the world’s major economies like China, which is the epicentre of the coronavirus, have taken a knock, Zimbabwe’s economy was yet to feel the impact of the outbreak.

“In terms of the coronavirus, many of you are worried that Zimbabwe, with its economy that is already not performing well, will further decline. God works in mysterious ways,” Mangudya said.

“The price of fuel, which is one product that government spends a lot to import, has dropped to US$0,30 from US$0,40 per barrel. Zimbabwe imports fuel worth US$1,5 billion per year, and since the price of fuel has gone down it means that for one US dollar we are going to get more and the biggest chunk of foreign currency which is consumed by fuel will go to other things.”

Mangudya further said that prices of other products that Zimbabwe exports including gold and platinum have increased, which is advantageous to the country.

“The price of gold has gone up to US$1 600 per ounce now because people are moving from the stocks to gold to preserve value. The same can be said for platinum and cotton, which are some of the major items we export. So in terms of the products we exports, that is gold and platinum, we are still safe,” he said.

According to the World Health Organisation, the coronavirus has affected 65 countries, claimed the lives of over 4 000 and infected over 125 000 people globally since it was first discovered in the Chinese city of Wuhan in December.

Mangudya indicated that the downside of coronavirus was that it could affect tobacco exports as China is the major market of the golden leaf from Zimbabwe.

“But if you look at tobacco, our major market is China. We do hope and pray that the price will remain the same. There are positives and negatives, but what we are saying is that Zimbabwe being a small economy is insulated from some of the negatives which come from such an outbreak,” he added.

This also comes as the United Nations Economic Commission for Africa (Uneca) has revealed that Africa has lost US$28 billion due to coronavirus and is expected have a reduction in economic growth from 3,2 percent to 1,8 percent.

“Nigeria, Angola and Algeria are the three largest exporters of oil across the continent and all of them will suffer the shock. If you hear that, you will think that the smaller exporters will not suffer but they will suffer as well.

“The other big shock will come through tourism. Countries like Morocco, Tanzania and South Africa, Zimbabwe and others get a lot of their revenue from tourism and as you know flights have been reduced,” Uneca executive secretary Vera Songwe said.

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