Back to 2008 all over again


HARARE – With the country continuing on its precipitous economic decline marked by a biting liquidity crunch, worsening company closures, diabolic job losses, acute cash shortages, soaring basic food prices and looming mass starvation, Zimbabweans are fretting that the horror of 2007/08 has revisited the country.

Then, the much-derided Zim dollar began its slaloming run towards its burial as the twin scourges of world-record hyper-inflation and food shortages — widely-blamed on the incompetence of the Zanu PF government — combined to deliver a deadly and unforgettable blow to long-suffering citizens.

Both political and economic analysts who spoke to the Daily News yesterday said it was entirely understandable that the recent resurgence of long, winding queues at banks and supermarkets, as well as the rising prices of basic foodstuffs had re-ignited palpable fear among Zimbabweans that the country had plumbed the debilitating economic depths of eight years ago.

The analysts also agreed that President Robert Mugabe and Zanu PF were solely to blame for what one of them described as “a perennial man-made economic crisis” — in the wake of the ruling party continuously implementing failed policies for the past 36 years.

Opposition leader Morgan Tsvangirai’s Movement for Democratic Change (MDC) said in the absence of renewed political leadership in the country, the lot of the average Zimbabweans was in fact set to be worse off than in 2008, when citizens would carry wheelbarrows of cash around with them, using trillion-dollar notes, to pay for a few groceries.

“No rocket science is needed to see that there is an economic implosion in Zimbabwe right now. The wheels have come off. The national economy, or rather the little that is left of it, has virtually collapsed.

“The financial levers are off. The Zanu PF regime is dead broke. The national treasury is dry. To imagine that there is less than $15 million that is presently circulating within the formal sector in Zimbabwe is like watching a horror movie,” MDC spokesperson Obert Gutu told the Daily News.

He also warned ominously that Zimbabweans should brace themselves for not just a replay of the heart-rending 2008 “economic disaster, but much worse”.

“Goods will soon disappear from the shops and already, there is a thriving black market for hard currency. Dealers are selling US dollars at a premium. Both the micro and macro-economic fundamentals have gone topsy-turvy.

“Zimbabwe is crying out for a new administration that will institute urgent measures to resuscitate the comatose economy, stimulate economic growth by repealing the Stalinist so-called indigenisation law warts and all, and also adopt policies that respect and uphold property rights as well as the rule of law.

“For as long as the rogue and clueless Zanu PF regime remains in power, the country is truly doomed,” Gutu said.

Buy Zimbabwe chief economist Kipson Gundani said there was an urgent need for a policy rethink in government to encourage economic revival.

“If I were the Reserve Bank governor I would suspend the bond notes issue and first engage the public.

“Our economy is ill due to lack of confidence. Economies are run on confidence and at the moment most people do not trust the present system and that is why there is a run on banks,” he said.

People’s Democratic Party (PDP) national spokesperson, Jacob Mafume, said at the rate at which Zanu PF continued to mismanage the economy, the country is set to record a negative three percent growth rate in 2016.

“Industry is far from recovering and the few companies that are operating will face serious hurdles from the planned reintroduction of the moribund Zimbabwean dollar in the form of obscure and illegal bond notes.

“The cost of electricity is also set to be hiked and thus push up further the cost of production and render the economy uncompetitive,” he said, also noting that as long as the indigenisation law remained intact, it would be “impossible even to the most adventurous investor to inject capital into Zimbabwe”.

“This is despite attempts by … Mugabe to hoodwink investors by claiming that he had clarified them. What is needed is not clarification but total repeal of the law as it is just a smoke screen to cover up extortion, looting and blatant corruption,” he added.

Mafume also called on Mugabe and Zanu PF to resign to allow Zimbabwe to heal and the economy to prosper.

A survey conducted by the Daily News on Tuesday showed that the prices of many basic foodstuffs had recently risen by at least 20 percent, while supermarkets had begun imposing a limit on the quantity of basic goods that individuals could buy.

For example, a two-litre bottle of cooking oil, which was going for an average of $2,99 on Friday last week, is now retailing for up to $3,60 — while foreign cooking oil brands have vanished from the country’s supermarket shelves altogether.

United Refineries chief executive Busisa Moyo told the Daily News that the cooking oil shortages that were being experienced were due to delays in payments to raw material suppliers.

“We are very concerned about the issue because payments are not being prioritised and payments are not going through fast enough despite the fact that we are in the top 10 of the central bank’s Import Priority list,” he said.

Moyo also noted that cooking oil producers were anticipating a 30 percent slump from the current 8 000 to 10 000 metric tonnes being produced, due to ongoing cash shortages.

Oil Expressers Association of Zimbabwe (OEAZ) president Sylvester Mangani echoed Moyo’s sentiments at a ministry of Industry meeting last Friday, saying the situation — if it continued unabated — would lead to a serious shortage of the commodity.

Disgruntled citizens interviewed by the Daily News said they were now resorting to hoarding most basic commodities in preparation for the looming food shortages.

“We have heard rumours that there is going to be major price increases on most basic commodities, as well as shortages because of low or no imports.
“As such, we are buying things like maize-meal, flour, cooking oil, rice and sugar among others, ahead of the expected price increases,” said a shopper who only identified himself as Mapfumo.

The latest development comes after the prices of other basic goods such as maize-meal and salt have also been increasing steadily.

Zimbabwe, which is battling an economic recession after failing to register significant growth since 2013 when Mugabe and Zanu PF romped to a hotly-disputed election victory, is in turmoil after the desperate central bank introduced a raft of measures to deal with the cash shortages last month, including limiting daily cash withdrawals.

The May 4, 2016 measures that included a proposal to introduce bond notes have seen depositors embarking on panicky withdrawals, fearing a return of the discredited Zimbabwean dollar.


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