November 14 marks 20th anniversary of Black Friday

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Mamvura’s Market Minute
Next Tuesday, November 14, marks the 20th anniversary of Black Friday, the start of the economic downturn which has lasted for the better part of the last two decades. As indicated in today’s Business Weekly Briefing, the event was almost certain precipitated by London’s refusal to fund the land reform programme.

As an indicator of things to come, the Industrials index hit an all-time high of 12,0981.95 in August 1997 and had been falling steadily up to the point when the Z$ fell by over 70 percent at one stage on November 14, 1997 following THAT letter from Clare Short.

The Z$ initially recovered some of its losses, but it took the market two years to get back to its 1997 peak. The loss of political will saw GDP shrink by at least 40 percent in the period up to 2009, and since then, there have been varying bouts of growth. It is, of course, easy to get stuck in the lack of progress clichés “missing two decades”, etc, but how honest is this?

The present is a subjective thing and it is interesting when you look back and read of what a “tough” year in 1994 when the post-Independence building boom was at its greatest.
Would we have experienced the strong growth trajectory everyone believed?

Would some other political event not have derailed this?
Certainly access to international capital would have seen infrastructure get to the point where all those 1960s-era projects would have been completed.

Harare Drive would have been joined up, there would be a double lane highway down Enterprise Road, there would not be an empty space in the vicinity of Rainbow Towers, but the moaning would be based on different issues — expatriates taking our jobs, expensive rentals, etc.

People were also leaving the country in the mid-1990s declaring there to be “no opportunities” because of the “economic environment”.

But consider that the export of human capital since brings in more foreign earnings than any industrial exports ever would have.

Up to 1997, people also forget double digit inflation constantly eroded earnings and Z$ depreciation was an annual event. With a relatively steady hand, it is certainty that we would never have made it into the hyperinflation record books, but as we know from what is happening to prices presently, inflation hurts more in double digits than in millions of percent.

As for the ZSE, market pundit Savvas Kyriakides forecast in September 1993 when there were 61 listed companies that there would be over 100 counters by 2000.
We did get up to 83, but counting Cottco and PG, we have 61 today.

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