Lance Mambondiani

Lance Mambondiani is an Investment Executive at Coronation Financial

European economic crisis: Is it time to head home?

AN EMERGING trend within the diaspora community in the UK points towards a gradual increase in the number of people who have, or are considering returning to Zimbabwe or emigrating to other countries as a result of the global economic crisis.

In June 2009, Prime Minister Morgan Tsvangirai suffered the wrath of a baying mob at a cathedral in London when he dared to suggest to seemingly adoring exiled comrades that “It’s time to go home”. Shaken and stirred by that incident, the Prime Minister appears to have permanently downgraded his engagement with diaspora groups to ‘non-existent’.

Is it possible that the European economic crisis has succeeded where the prime minister failed, resulting in a silent wave of migration back to Zimbabwe?

Although the numbers may not be significant, it seems there is an increase in the number of people on the retreat. The reasons could be far from political – they are economic.

Britain, Europe’s leading economy outside the euro zone and the world’s sixth or seventh largest is now enduring a prolonged period of near stagnation. Growth is expected to remain below one percent in 2012 for the second year running. Prospects seem to have dimmed to the extent that the Conservative-Liberal Democrat coalition is planning for a seven-year period of public spending cuts and tax increases to reign in the budget deficit. Britain is having to get used to a prolonged period of adjustment after 25 successful years. In the USA, the world’s largest economy, the prospects aren’t any better.

Nobel Prize winning economist Joseph Stiglitz was recently quoted as saying: “Fundamental problems in the U.S. and Europe are deep. Looking at it from the point of view of the U.S. workers, no-one really anticipates us being back to normal before 2017, and that’s optimistic.”

For the Zimbabweans who migrated to the UK for better prospects, the economic advantage of being in the diaspora was premised on a crumbling economy back home. Exchange gains meant one British pound was worth a fortune on the parallel market. This advantage vanished with dollarisation of the Zimbabwean economy. In truth, those in the diaspora, besides bearing the burden of looking after their families back home, benefitted immensely during the economic chaos. It is only human nature that some may have wished for it to endure a little longer.

Besides the changing fortunes in Zimbabwe, the European economic downturn has resulted in shrinking job opportunities and a rise in the cost of living. Few in the diaspora can still afford to consistently send money to their relatives or buy a property which was the traditional justification for economic migration.

But has Zimbabwe turned the corner to justify this renewed interest? The Finance Ministry forecasts 9.3 percent growth for 2012 whilst a more realistic prospect is an IMF growth projection of 5.5 percent. Sub-Saharan Africa as a whole has a growth projection of 5.57 percent for 2012 on improved commodity prices.

The Zanu PF-MDC coalition has made significant progress in stabilising economic collapse and political tensions. The indigenisation of the Zimbabwean economy has also created significant opportunities particularly in the mining sector. The discovery of new diamonds and gold deposits has introduced new economic dynamics. With sound economic management, the growth fundamentals are justifiable.

Regardless, unemployment remains above 75 percent; the country continues to experience frequent water and power disruptions. Salaries have remained largely disproportionate to commodity prices. Despite dollarisation, surging inflation has resulted in frequent price increases as the market struggles for price equilibrium.

Assuming the wave of migration from the diaspora is real, this could have an impact on Zimbabwe’s human capital, access to capital and entrepreneurial capacity of some of the prodigals. A latent and unintended threat to the established political order could be the impact of this migration on voting patterns in a pending election or the emergence of ‘diaspora candidates’ such as Ezra Sibanda or Nkosana Moyo. How will that change the political landscape?

In truth, Zimbabwe’s economy recovery remains largely a prospect than a reality. However, the choice between economic hardships in a cold foreign country and the prospects of a recovery on home ground has remained one of the hardest decisions that many families in the diaspora are having to make. Moreover, migrants are not just economic actors who follow income maximisation motives. They are social beings, who put down roots and form relationships in their new countries.

To migrate or not to migrate remains an intimately personal decision. The choice, however, maybe be easier if the global economic crisis continues to bite. Perhaps Tsvangirai’s call to come back home could receive less heckles – if at all he ever returns to face another angry London mob. The current economic reality suggests he may be right.

Lance Mambondiani is an Investment Executive at Coronation Financial. The view expressed in this articles are personal and do not necessarily reflect the position of Coronation Financial.

The foregoing has been prepared solely for information purposes only based on independent research by Coronation, no representation or warranty; express or implied is made to its accuracy or completeness. Coronation therefore accepts no liability for any loss arising, whether direct or indirect