HARARE – The United States of America must engage with the Zimbabwean private sector to help the southern African nation revive its ailing economy, a top academic and researcher has said.
Global Economy and Development, Africa Growth Initiative fellow Witney Schneidman said it was important for the US to assist in restoring growth and confidence in Zimbabwe’s once-promising economy that has been severely mismanaged for the better part of two decades.
“An economic reform initiative in Zimbabwe has been long overdue,” he said adding that the country’s gross domestic product growth has dropped well below two percent, and the economy is half the size it was 15 years ago.
“The country is experiencing its most severe drought in 20 years due to El-Niño conditions and nearly three million people are at risk of starvation. Poverty is expected to rise in 2016, and the poor, especially in the rural areas, will be most impacted,” Schneidman added.
This comes as President Robert Mugabe and his Zanu PF — aware of their failure to deliver on the 2013 election promises — recently came up with a 10-point plan to turn around the country’s economic fortunes.
Schneidman, however, questioned the nonagenarian’s sincerity in implementing the programme given the government’s poor track record on human rights, respect for the rule of law, and the intensifying competition to fill Zimbabwe’s growing leadership vacuum, given Mugabe’s advanced age.
“Moreover, the recent announcement by Reserve Bank governor John Mangudya that he will introduce local ‘bond notes’ has raised fears that the cash-strapped economy will return to the chaos and hyperinflation that crippled the economy prior to the move to the dollar in 2009,” he said.
“Even though local coins have already been introduced into the economy, and Mangudya has a $200 million loan from the Africa Export-Import Bank to support the notes, his plan for a local currency has deepened the country’s economic anxiety, especially among Zimbabwean businesses and professionals,” the seasoned academic added.
The United States, along with many other Western countries, imposed sanctions on Zimbabwe’s leadership in 2002 following reports of election rigging and human rights abuses.
Despite the sanctions, the United States remains one of the major providers of humanitarian aid to Zimbabwe.
Schneidman noted that the world’s number one economic giant must take a cue from its European counterparts and take a leading role in revitalising Zimbabwe’s economy.
For example, he said, the President’s Advisory Committee on Doing Business in Africa could conduct a fact-finding visit to the country and representatives from Zimbabwe’s private sector could be invited to participate in the second US-Africa Business Forum in September in New York.
“The United States should also coordinate its policy with the European Union, which lifted its sanctions and asset freeze in 2014, except for a travel ban on President Mugabe and his wife, Grace. After 13 years, US sanctions on Zimbabwe have outlived their usefulness,” he said.
This comes as the broader perception in the international business community is that America has sanctions on all of Zimbabwe, despite Washington claiming that the programme is “targeted” on 98 individuals and 68 entities.
“Reform critics, such as Grace Mugabe and her supporters, point to US sanctions to rally support for herself and her husband,” Schneidman said.
“A pragmatic US approach would contribute to progress on the reforms and Zimbabwe’s re-engagement with the international community and the International Finance Institutions.
“However, a revised US approach to the country should be predicated on achievement of specific economic reform targets, respect for human rights, and the rule of law and, ultimately, free and fair elections in 2018,” he added.