Association for Free Research and International Cooperation

Zimbabwe update: Politics, Social and Economy

22.11.2019
Article from AFRIC Editorial
The political situation of a country affects its economic setting. The economic environment affects the business performance. This influences factors like taxes and government spending, which ultimately affect the economy. Tighten your seat belts as we walk through the Zimbabwe state of affairs.

Zimbabwe Political landscape

Zimbabwe is still being haunted by the disputed 2018 Harmonised elections. The main impasse between opposition Movement for Democratic Change (MDC) and the ruling party

The Zimbabwe African National Union – Patriotic Front (ZANU PF), and their failure to agree to dialogue after results of the 2018 harmonised elections which the main opposition contested. Zimbabwe’s turnaround is predicated upon political stability and coherent policy that are in harmony and reflective of inclusive input from various political parties. The continued stand-off between these two parties has left the country in a deadlock. Some political parties have met on a few occasions but it seems the train will disembark without the main opposition party MDC. A platform named Political Actors Dialogue (POLAD) was even instituted in an effort to bring together all political parties and map the way forward but this has not bear fruit.

A number of peaceful demonstrations were planned but were not permitted by the police, the reason being they were said to turn out violently once the green light is given. Apparently, the police base their actions from the hypothesis on the ground stating that opposition members are armed and intend to turn the demonstrations into violence so that they loot and destroy property hence pulling the plug on them.

The government on the other hand has blamed the slow progress of the country’s turnaround on the supposed illegal sanctions imposed on the country by the West. The President of Zimbabwe Mnangagwa solicited the help of his Southern African Development Community (SADC) counterparts in denouncing sanctions and advocating for their removal. The President claimed that even though the West says the sanctions are targeted towards individuals in government, they are in fact hurting the ordinary Zimbabweans. Some critics have stated that this was a way of shifting blame from government’s failure to address mounting problems haunting Zimbabwe. Other critics have even pointed out that Ian Smith’s regime in the then Rhodesia was under sanctions but managed to build a stable economy even though it was not a democratic environment.

The main point espoused in the illustration was that despite the punitive sanctions, the Smith regime managed to make progress economically and did not resort to blaming the West for its failures. The sanctions debacle culminated in a day of marching declared by the President where citizens were encouraged to participate to show their displeasure against sanctions. One then wonders why some demonstrations are authorised without debate while others are not. Is it because of the perception of risk of violence that would be witnessed if permitted? One then wonders why some demonstrations are authorised without debate while others are not because of the perception of risk of violence that would be associated if permitted. The march against sanctions caused strained relations between the USA ambassador to Zimbabwe and with the Zimbabwean government because of comments made by the ambassador that sanctions were not the cause for the country’s economic failures but because of the high levels of corruption and economic uncertainty. According to the ambassador only 141 individuals and companies are on the United States sanctions list in a country of 16 million people. These people are on the list for allegedly engaging in corruption, committing human rights abuses and undermining Zimbabwe’s democratic process.

Social Side

Zimbabwe’s social standing has been characterised by public unrest as people express their grievances over many unresolved political and economic concerns. Citizens, churches, civic organisations together with opposition political parties join hands to express their anger over deteriorating living standards. According to these groups, they are targeted for   brutal clampdown by the police. Their hope of building a better Zimbabwe diminishes as the government enacts draconian economic policies. Two years ago, the public mood was full of hope as people expected the so called new dispensation to dispense jobs, improved health facilities and food on the table. But all that euphoria has completely died down as people wake up to the reality of a worse off position than what they were during the Mugabe era. They did not mind that Emerson Mnangagwa and General Chiwenga orchestrated a coup because they removed an unpopular leader whom they thought was the showstopper but now hindsight is implying that the era of Robert was a better “devil” than Emmerson!

Newspapers are constantly awash with civil servants striking and planning to strike as life becomes unbearable due to the decrease in purchasing value of the national currency. They wake up to face the tough reality of increased cost of doing business in the form of increased prices to citizens. Bills, school fees, food, transport are relentlessly reducing the value of stagnant salaries are not adjusting proportionally to inflation. But there is one surprise, Zimbabweans being fun loving and possessing a well-developed sense of humour have decided to laugh off their plight on social media platforms. WhatsApp, Facebook and Twitter are full of jokes touching on electricity load shedding, fuel queues, scarcity of bread and the so-called austerity measures. Social media seems to be a correct barometer that can reflect a true and fair view of Zimbabwe’s state of affairs. They make fun of president Mnangagwa’s popular Zimflag scarf, General Chiwenga’s homemade Shona accent and Mnangagwa’s drama like speeches on public forums. Not to be left out in taking part on the social space are the churches. Charismatic prophets tell the masses hopeful messages continuously not matching the reality that things keep deteriorating. The nation has not healed from the Gukurahundi massacres, the Ndebele and the Shonas are constant rivals. These fights have transmitted into Zimbabwean institutions where they continue.

The rain season is upon Zimbabwe and this brings into remembrance the humanitarian crises caused by Cyclone Idai in early 2019. The government is faced with challenges of resettling the people, providing food infrastructure building, rehabilitating roads and bridges, educational and health facilities of those affected. There may be a need for psychological therapy as some lost their loved ones who were either washed away by the floods or could not be located. The country at a broader scale has been affected by drought and in some instances shortages of maize meal have been experienced with the government relying on imports and humanitarian aid to mitigate the drought.

Economic Aspect

The economic landscape is characterised by runaway inflation reducing people’s purchasing power resulting in poverty, acute shortage of foreign currency, high unemployment rate, lack of trust in the monetary authorities by citizenry, rampant corruption all resulting in the deteriorating living standards and plunging the once glorious nation into abject poverty. Increased money supply in form of Treasury Bills, local currency the Zimbabwean dollar and the unpopular bond notes have induced inflationary pressures upon the economy, consequently resulting in the decrease in purchasing value of currency further taking away people’s purchasing power.

The government has been suffering the effects of the Transitional Stabilization Program (TSP) under the banner “austerity for prosperity”, which according to the government meant to resuscitate the economy whose deterioration is blamed on over spending and lack of financial discipline expressed over the years. Economists have since reiterated that the current Minister of Finance and Economic Development has done little in addressing the economic side but has merely focussed on the Finance function only. They argue that the enacted since 2017 are not stimulating production, manufacturing and value addition process which anchors economic stability in normal economies.

Policy inconsistency, ineffective communication, lack of transparency and lack of consultation has negatively affected the ministry in the main. This is evidenced by the backlash from business fora after the announcement of the National Budgets or new policies. This behaviour curtails the buy in of industry leaders alike. It seems the Finance Ministry has lost touch of what is happening on the ground.

A good example of the aforementioned is the introduction of the local currency in an effort to stabilize the economy. Government injected new $2 coins and $2 notes which without proper scrutiny one might mistake for the bond notes already in circulation as the difference is on the ‘name’ but the notes are identical. Their introduction was made on Monday 11 November but there has been an outcry already of the new currency being spotted on the black market which is a cause for concern as the injection of this new currency was meant to cripple the black market among its other intended purposes.

A story doing rounds on social media of one individual withdrawing way more than the stipulated requirements raised concerns over the financial discipline of the institution in question and the trajectory of the new currency and raise questions on whether the government will be able to bring sanity to the banking sector as proposed. Another burning issue was the backing of the new currency as a way of avoiding the rising inflation although the Minister of Finance projected a single digit inflation by 2020. However, it still remains uncertain if the new currency will survive compared to the previously introduced bond notes without adequate backing. Economists argue that a currency that functions at its optimum is one with a strong backing in the form of mineral reserves in the form of gold reserves, stocks and bonds. However, with the low mineral production experienced in Zimbabwe government may have found it difficult to maintain the status quo.

In as much as the minister reiterated that the Trans Stabilisation Program was meant to do away with short cuts and magical solutions in reviving economy, little progress has been noted with 14 million budget surpluses recorded from January to June. The 2% intermediary tax on all electronic transactions was heralded as a stroke of genius for boasting the government coffers albeit at the detriment of the citizens as its double taxing to the formally employed.

Inflation continues to escalate with prices continuing to sky rocket. In as much as there are no official figures on the rate of inflation, one does not need a rocket scientist to show that it has spiked to unprecedented levels. Basic commodities have increased by at least 16 times since January 2019 and fuel has not been spared, having increased by 13 times since January. Average spending for citizens has been eroded with little or no hope for improvement in the near future. Discretionary spending has been curtailed and citizens are left with little or no money to save. It was termed “living from hand to mouth” meaning “one only survives to afford themselves food and nothing else.” But at this rate food is expensive and will be beyond the reach of many.

Charges on mobile money transactions have been outrageous and the government through the introduction of the new currency hoped it would be a thing of the past. The rationale being that if cash is readily available there is no need for the black market and Ecocash agents to fleece members of the public of their hard-earned cash. Government has further promised to pay its civil servants their 13th cheque under a proposed arrangement with treasury. However, some though appreciating the gesture are doubtful if government is willing to address their remuneration challenge effectively as Medical Doctors are still on strike since September 2019.

Parting shots

The political instability led to the deplorable economic and social deficiencies that make it hard for citizens to carry on their day to day activities with the business community being hamstrung as it difficult to maintain the going concern of businesses.

In light of the challenges facing the Zimbabwean nation, the following are possible remedies. An all-inclusive dialogue presided over by a neutral arbitrator, setting up a transitional government and subsequently suspending elections to give the nation time to heal politically, socially and economically. There is need for several workshops to encourage the spirit of inclusivity and national unity. Monetary reforms aimed at bringing back the Zimbabwean economy on course should be instituted. Zimbabwean citizens should be patriotic to unite on matters of national interest regardless of their political affiliation, religion, tribe or race. Home grown solutions of finding each other will be key in turning around the country’s fortunes.

Article from AFRIC Editorial

Photo Credit : google image/illustration

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