Next to lawless Somalia, Zimbabwe has been invariably described as a basket case due the collapse of its economy. But there are now hopeful signs the country’s future may be better than its recent past.
After a three-month halt, the Zimbabwe Stock Exchange has resumed trading-and in United States dollars, a move the new government hopes will help attract investment and revive the economy.
The ZSE had been viewed by investors in Zimbabwe as one of the few relatively safe havens in an economy ravaged by the world’s highest inflation rate.
Trading stopped in November during a government crackdown on banks and stockbrokers accused of allowing traders to use fraudulent checks to purchase shares.
The ZSE asked the government for permission to trade in foreign currency when it restarted because of the collapse of the Zimbabwean dollar, a request the central bank approved earlier in February.
The move follows the formation of a unity government by long-time rivals President Robert Mugabe and Prime Minister Morgan Tsvangirai earlier this year, after months of wrangling. The two leaders have pledged to make reviving the economy a top priority.
Analysts applaud the revival of ZSE despite challenges that are likely to result from dollarization of the local market. Zimbabwe is perhaps the only country in Africa that now uses the U.S. currently for domestic stock trades.
But that may be the best thing for foreign investors willing to dip their toe in the Zimbabwe market. It provides a small measure of security in a market where there’s none. One other benefit: unlike Johannessburg, shares here in Harare are cheap and the potential upside is huge despite the uncertainty.