‘Zimbabwe’s problems rooted in poor governance’
POOR governance and a lack of transparency remain the major impediments to Zimbabwe’s quest for economic stability and recovery, a British think tank has said.
Taking over after former President Robert Mugabe’s 36-year reign in November 2017, the current administration had promised sweeping reforms to bring the economy back on track, but the situation has deteriorated with inflation now above 800 percent, while hopes for international re-engagement have waned amid reports of serious graft in State institutions and policy “mishaps”.
“Zimbabwe has significant human capital and vast resource potential that could drive economic development, contingent on fiscal and monetary policy normalisation.
“The latter is intrinsically tied to improved governance and transparency, increased investment openness and meaningful re-engagement with multilateral lenders and the international community in the years ahead,” Fitch Solutions (Fitch) said recently in its 2020 country risk report for Zimbabwe.
The Fitch Ratings subsidiary said focusing on these “key” areas would improve the situation despite headwinds such as the country’s vulnerability to factors like adverse weather conditions, commodity price shocks, still-low industrial productivity and foreign currency shortages.
The think tank, which recently said the country would continue to face problems accessing international financing due to its lack of progress on political reforms, says governance issues like “endemic corruption and weak property rights protection” are compounding risks such as “high reliance on primary sector exports, high import demand, high borrowing costs and a yawning infrastructure deficit”.
“These factors combined with volatile foreign currency availability, high inflation and rigid labour market regulations significantly lower the country’s competitiveness relative to its southern African neighbours, such as Namibia, Botswana and, to a greater extent, South Africa,” Fitch said.
This also comes as others, including American think-tank Rand Corporation (RC), have highlighted governance issues as the root of the country’s problems.
“For decades, Zimbabwe’s patronage-based economy meant that economic fortunes were (not) determined by business acumen or market forces, but by political allegiance to the ruling party,” RC said in a recent report, adding President Emmerson Mnangagwa’s government had done little to discourage the practice, as “politics and economics were inseparable in the country”.
“Although the… government has taken some modest steps that could be seen as an indication of progress — particularly on the economic front — there is a wide gap between the government’s reform rhetoric, and the reality on the ground,” it said.
“Harare’s pledges have fallen short, as genuine reform has been extremely sluggish and it seemed the well-rehearsed slogans had been aimed at pacifying the international community,” it added.
RAND, whose global researches feed into the US’s intelligence communities, defence department, western allies and foundations’ policy positions, also says political reforms are “severely lagging and have virtually stalled”.
On his part, Mpakama Mbete, South African ambassador to Zimbabwe has also said the country must urgently correct issues around property rights, bilateral agreements, dividend repatriation and the elimination of cartels-driven graft as well as encouragement of industrial competition if it is to attract foreign direct investment (FDI), and resuscitate its floundering economy.
“There is a need to open the economy to competition and the establishment of new capabilities. We believe in a highly competitive environment for FDI,” he said.
And most recently, the Zimbabwe Catholic Bishops’ Conference said it feels that the government is focused on things other than national democratic priorities, which it says “amounts to dereliction of duty”.