Emerson Mnangagwa, President-elect, Republic of ZimbabwenPDUMCQ9t5IZimbabwe businesses reacts to Mnangagwa win (video) George Tah 4th August 2018 African Business News, Economic Events The contested election saw incumbent Emmerson Mnangagwa secure a narrow victory over his closest challenger Nelson Chamisa from the Movement for Democratic Change (MDC) alliance. Although the majority of the election was peaceful, delays in announcing the result led to opposition supporters in the capital Harare protesting against the Zimbabwe Electoral Commission. The protests turned deadly as the army fired indiscriminately, killing six people. The election came at a pivotal moment for the Southern African nation, following over two decades of economic turmoil. At the nadir of the crisis in 2008, the economy shrank by 18%, hyperinflation reached 500bn per cent, and unemployment was at 95% by some estimates. The economy has stabilised somewhat since the downturn with inflation running at more than 14% and the budget deficit at 12% of GDP. Economic growth is projected to reach 3.0% in 2018 on account of a good performance in agriculture and mining sectors. However, the economy still faces deep systemic issues including cash shortages, caused by a lack of foreign currency circulating in the economy. Zimbabweans hope that the international financial community will re-engage with the country and bring an end to the economic stagnation that has blighted the country. Sifelani Jabangwe, president of the Confederation of Zimbabwe Industries (CZI) Sifelani Jabangwe, president of the Confederation of Zimbabwe Industries (CZI), (pictured), says, the business community, in particular, has high expectations that the incoming president will prioritise tackling the liquidity problems in the country.” “The key challenge for Zimbabwean businesses is access to finance,” he says. “Since the period of hyperinflation, most of our companies experienced capital erosion, and we were unable to access any other investment to upgrade plants and machinery. This caused a significant slump in the manufacturing sector, with many companies struggling to survive by revising their business models and others simply going out of business.” “So there is a need for financing to help revive the manufacturing sector, either through bank loans or investment,” Jabangwe, who is also the general manager of the industrial equipment manufacturing firm James North Zimbabwe, added. Since the Zimbabwean dollar was scrapped in 2008, the country has been using a basket of other currencies, with the US dollar as the most utilised currency. The use of the US dollar as the currency of choice has led to severe cash shortages, with many firms having to purchase US dollars at 15% or above the market rate. This, together with the devaluation of other regional currencies, has made many Zimbabwean firms uncompetitive in terms of exports especially when the dollar strengthens. In this difficult environment, Zimbabwean businesses have had to adapt their operations, including focusing on regional exports as local demand waned. The manufacturing sector is projected to grow at 1.4% in 2018 mainly driven by food processing firms making the most of the bumper good agricultural season to source local raw products. However, smuggling of goods such as clothes and footwear continue to harm firms that focus on those finished goods for domestic consumption, despite government attempts to implement import controls.