The most topical discussion in the world right now is Russia’s invasion of Ukraine. Zimbabweans being Zimbabweans have of course been joking about it, making memes, and so on. However, the Russia and Ukraine situation is a precarious one. Hypothetically, any ill-thought decision can potentially escalate things into a nuclear war. So we can joke about it and all but it is a matter of global security. Yes, you are in Zimbabwe, thousands of miles away from Ukraine right now. I guess that makes you feel unbothered because you are safe. That does not mean you are completely impervious to the effects of that war though. You are affected somehow and here is how the Ukraine war affects you in Zimbabwe.

Fuel Price Increases

So this you have already seen because fuel prices were recently hiked. This was obvious given the huge reliance on oil globally. When the price of oil changes, there are ripple effects throughout the world. This has a bearing on businesses and customers. It becomes increasingly costly for businesses to run. In their quest to stay afloat they transfer the burden to the customer. Thus you will, as a customer, who you are in many ways, begin to contend with price increases all over.

I guess it clearly shows how sourcing fuel from outside the country is not a good framework. Anyways, I tend to laugh when someone rubbishes fuel price hikes as nothing when they do not have a car. You might not have a car and never have to buy fuel but that does not mean you are immune to the effects of fuel price hikes. The same goes for the Ukraine war, you better be concerned about it because it does affect you.

The Price Of Commodities

Zimbabwe is mainly an importer but does export as well. In both scenarios, we are usually at the mercy of what transpires on the global stage. Wars like the one in Ukraine does have a bearing on the prices of commodities on the global market. It is not always black and white though as shifts can be either desirable or undesirable. Whichever the case, any shift does affect our economy.

For example, exports are important to us because they contribute to foreign currency earnings. If prices of commodities on the global market plummet that adversely affects us. Even on the import side, it becomes more expensive to import. This is crucial especially when you consider that Zimbabwe imports more than it exports. The prices of commodities might seem like none of your business. Yet when it all boils down, it is mostly the ordinary person who feels the effects of the shifts.

Hurdles In Supply And Value Chains

A supply chain refers to the entire network of entities, directly or indirectly interlinked and interdependent in serving the same customer. It comprises vendors that supply raw materials, producers who convert the material into products, warehouses that store, distribution centres that deliver to retailers and retailers who bring the product to the ultimate user. Supply chains form the basis for value chains. Value chains refer to activities such as distribution or logistics (inbound and outbound), manufacturing, marketing, selling, and after-sale services.

When you look at that framework, you can understand why the Ukraine war is getting in the way somehow. There are key transport networks (water, road, rail, or air) that have been disrupted by the war. Some key distribution centres have been incapacitated or even destroyed. Logistics has also been a nightmare in some cases with valuable cargo being held up at sea, for example. Some logistics involving air travel have also been affected as well. Though the effects on Zimbabwe might not be largely direct they are mostly indirect. Zimbabwe has direct trade relationships with Russia and Russian allies and that could become more and more important if conflict intensifies.

The last thing to mention here regards possible effects on Zimbabwe digitally. We now live in an increasingly digital economy. As in, the internet, digital products, and services are now a major part of our lives. Some businesses are even wholly reliant on internet connectivity to thrive. We also now live in a world where transactions are more digital now physical. Innovations like mobile banking, mobile money, and so on are our lifelines. Consider what is happening with the Ukraine war e.g. the sanctions being placed on Russia. Most of those sanctions can affect certain digital infrastructure that we rely on. The war is more than just a physical one; it has degenerated into a cyber-war and economic war as well. We have no guarantee that we will not be affected by that. Thus it is important as a country to start exploring how we can brace ourselves for any dire scenarios. Remember that time when Facebook, WhatsApp, and Instagram went down globally. Something of an even greater magnitude could happen because of this war and we will be affected.