Zimbabwe: hopes fade as economic crisis worsens
Josh Mock, BA Arabic and Persian
The UN estimates that half of Zimbabwe’s population of 8.5 million will be food insecure by 2020.
Hopes that the President of Zimbabwe, Emmerson Mnangagwa, can bring about economic renewal to the south African nation are dwindling after the country’s annual inflation reached nearly 300% in August, according to the International Monetary Fund (IMF). The economic crisis has given rise to a deterioration of living standards, including energy shortages and rapidly rising food prices. The UN estimates that half of Zimbabwe’s population of 8.5 million will be food insecure by 2020.
Zimbabwe’s economy has seen a difficult year – both in terms of policy and external factors. According to the IMF, ‘severe weather shocks’ affecting the country this year have hampered production, with droughts and cyclone Idai affecting agriculture and electricity generation. Meanwhile, attempts by the government to reduce the deficit through policies known as ‘fiscal consolidation’ have slowed growth. Although the government blames western sanctions for thwarting economic recovery and deterring investment, the weakening of confidence in the government and their policies has increased the pressure on exchange rates. Furthermore, opponents of Mnangagwa accuse the President of lacking commitment to political reform, and have criticised his use of heavy-handed tactics to clamp down on anti-government protests, further exacerbating distrust in the government.
Mnangagwa acknowledged the economic crisis and the need for reform in an address given to parliament on October 1st. Media outlet, Al Jazeera, reported that this was boycotted by the main opposition Movement for Democratic Change (MDC). Mnangagwa pleaded with the nation for time and patience in order to revive the economy from the ‘dead’. ‘I’m aware of the pain being experienced by the poor and the marginalised. Getting the economy working again from being dead will require time, patience, unity of purpose and perseverance,’ Mnangagwa said. In a controversial move the Finance Minister Mthuli Ncube suspended the publication of official annual inflation data in July, although the IMF continues to publish its data on the country’s economic situation.
Led by Mr. Gene Leon in September, a recent IMF mission to review progress in Harare laid out several recommendations for the country to tackle the economic crisis. ‘Policy actions are urgently needed to tackle the root causes of economic instability and enable private-sector led growth,’ reported Leon. Such actions include the containment of fiscal spending, the tightening of monetary policy to stabilise exchange rates and build confidence in the currency, and improvement in the transparency of monetary statistics. The preliminary findings also criticised Zimbabwe’s ‘slow progress on international re-engagement,’ and Leon concluded that ‘efforts will need to be intensified on both economic and political fronts to drive Zimbabwe forward.’