Antidote for De-dollarization: Lessons for Zimbabwe

When Zimbabwe abandoned its currency and adopted the multiple currency exchange rate system in 2009 which was anchored on the United States dollar, there was general consensus that dollarization was the only way the country could restore macroeconomic stability and grow the economy. Despite dollarization, the country has not been spared from major current account reversals, amplified output fluctuations in crucial economic sectors and increased volatility of key relative prices in the economy. In fact, economic growth and development has been on downward trend since dollarization. There are ample studies in empirical literature that demonstrate why countries dollarize yet few studies focus on how to de-dollarize and reintroduce own currency. The aim of this research was to review empirical studies on the cost and benefits of dollarization in emerging markets such as Zimbabwe and also to provide insights on de-dollarization strategies. The paper contributes to literature on strategies that developing countries can adopt to smoothen transition from a dollarized economy towards own currency. The paper recommends that prior to de-dollarization and adoption of own currency a number of intervening strategies need to be in place and these include; implementation of policies that strengthen macroeconomic stability through fiscal surpluses, introducing prudential measures to better reflect the risks of currency mismatches; developing a securities market with longer maturities in domestic currency; financial sector development and growth of export revenue. Keywords: Antidote, Dollarization, Multicurrency, De-dollarization, Zimbabw

Determinants of foreign direct investment (FDI) in Zimbabwe: What factors matter?

The role played by FDI as a source of capital which augments domestic savings is attracting close attention in all developing countries. Whilst FDI inflows to Sub-Saharan Africa have increased significantly, Zimbabwe has not benefited from this boom. The main motivation of the paper is to respond to the question: What factors matter most in attracting adequate FDI inflows to Zimbabwe? An understanding of these factors will assist Zimbabwean policy makers to construct and implement strategies for FDI attraction and solve current challenges of abject poverty, low industrial productivity, high unemployment and lethargic economic growth. Adequate FDI inflows generate employment opportunities, augments domestic foreign exchange reserves, upsurges positive technological externalities and human capital skills. To accomplish the goal the study relies on a mixed methodology involving cross-section study and also employs a multivariate regression equation using annual time series data over a 31 year period (1980 to 2011). Estimation and survey results suggest that gross fixed capital formation, inflation, trade openness, corruption, political instability, poor governance, weak export competitiveness and inconsistent government policies hinder FDI inflows to Zimbabwe. The study recommends that Zimbabwe overhaul its macroeconomic policies in order to create a stable and hospitable investment climate that fosters export competitiveness, trade openness and domestic capital formation. In addition the country should adopt sound economic policies that minimises country risk, political instability and corruption in order to attract adequate FDI inflows

Does Corruption Really Affect the Growth of Entrepreneurship in Zimbabwe?

Like in most developing countries, the level of entrepreneurship growth as measured by the number of new firm start-ups has become a central economic issue in Zimbabwe. Necessity and opportunity-driven entrepreneurial activities in the country are being driven by weakening economic growth, poverty, idiosyncratic macro-uncertainties and high levels of unemployment. The country has consistently been listed by the Transparent International Perception of Corruption Index as one of the most corrupt countries in Sub-Saharan Africa outside a war zone. The study examined the nexus between entrepreneurial activities and corruption in Zimbabwe using Ordinary Least Regression equation for the period 1998 to 2016. Our findings suggest that productive entrepreneurial activities in Zimbabwe are significantly being curtailed by regressive tax regimes coupled with enfeebled public institutions. We also demonstrate a positive one way causality running from entrepreneurial activities to corruption and, hence proving the applicability of the greasing hypothesis of corruption in Zimbabwe. The study recommends a number of policy prescriptions that include: reducing levels of taxes on entrepreneurial activities, eliminating red-tape and regulations that add costs on opportunity-driven entrepreneurship, increasing the effectiveness of public institutions especially those that deal with entrepreneurs, introducing robust legislation aimed at reducing public officials’ opportunities for rent seeking in entrepreneurial activities that are most prone to corrupt practices. In addition, there is need to monitor bureaucrats and impose severe penalties in order to make corruption payoffs too risky. Our study contributes to the literature on the greasing effect of corruption on entrepreneurial activities in developing countries

Prioritising Factors Influencing Mountain Tourism Using a Fuzzy Analytic Hierarchical Process: A Case Study of Mount Nyangani, Zimbabwe

The purpose of the study was to prioritise factors that may influence mountain tourism in Zimbabwe. Zimbabwe has diverse mountain ecosystems that can attract tourists with various motives ranging from self-fulfillment, spirituality growth, wellness, local culture and religious experiences to simple outdoor adventures. Quantitative data was collected using a ten-point structured questionnaire that was administered to ten mountain tourism experts who were selected using purposive sampling. The findings show that key factors that influence mountain tourism in Zimbabwe include destination image, tourist satisfaction, community participation and local physical infrastructure. Policy makers should encourage green investments in mountain regions in order to unlock growth opportunities in mountain-based communities. Investing in quality complementary touristic infrastructure may also help to improve destination image. Raising awareness about the negative impacts of tourism on mountains’ unique ecological and social systems, as well on behaviour change in the people who live there, is also needed at all levels, including individual mountain tourists, tourism businesses and local communities. The study contributes to literature by pioneering the use of the fuzzy analytic hierarchical approach in order to interrogate factors that influence mountain tourism in Zimbabwe

Bifactor modelling and measurement invariance testing of the Innovative Behaviour Inventory

Innovation-driven growth demands that organisations periodically assess the innovative behaviour of employees and facilitate appropriate interventions to nurture it. Human behaviour is complex. Corporate researchers rely on standard measures to appreciate employee behaviours at work. Quality tools support decision-making by detecting gaps and creating opportunities for improvement at work. One promising measure is the Innovative Behaviour Inventory (IBI). Although the IBI was developed and validated in Europe, it can still be applied in other contexts if it exhibits adequate psychometric properties and diagnostic utility. Using a probability sample drawn from Zimbabwe, the study used bifactor analysis to assess the dimensionality of the IBI measurement model. The study assessed the measurement invariance of the IBI using multi-group confirmatory factor analysis. The study modelled the general factor of the IBI. Multiple tests confirmed the internal consistency reliability, convergent and discriminant validity of the measure. The IBI was invariant across gender groups. The IBI adds to the suite of available tools for assessing innovative work behaviour as part of a dedicated leadership excellence agenda. The IBI offers practical advantages because of its integrated, multi-faceted nature, diagnostic utility and robust psychometric properties. Periodic surveys, using the IBI, provide corporate researchers and organisational leaders with information on the quality of innovative behaviour that resides in their organisations. The IBIs invariance and ability to quantify, as summative scores, the levels of innovative behaviour enable sub-group analysis. Sub-group analytical outputs facilitate targeted interventions in the workplace. Contribution: Appreciating the quality of the IBI measurement model carries ethical and practical significance. Studies of this nature safeguard the subjects of research and promote purpose-driven corporate and scholarly work