ZIMBABWE’S lost decade of economic meltdown, which ended in 2009, has been blamed on a host of problems. For Zanu PF, economic sanctions imposed by the United States and the European Union have triggered this collapse.
By Victoria Mtomba
Prime Minister Morgan Tsvangirai-led MDC and other likeminded parties, however, contend that the country’s poor debt record as well as ill-informed economic policies triggered this meltdown.
Currently, saddled with a $10,7 billion external debt and an increasingly unsustainable internal debt, Zimbabwe’s future remains bleak unless the debt issue is addressed, analysts argue.
Reality has finally sunk on the shaky inclusive government that the country badly needs concessionary funds from international finance institutions despite vast natural resources. Zimbabwe has the second known largest platinum reserves after South Africa.
The non-payment and accumulation of debt began in 1999 due to balance of payment constraints, with a large proportion of the debt, according to government estimates, being inherited after Independence in 1980.
Last week the International Monetary Fund (IMF) approved a staff-monitored programme on Zimbabwe paving way for re-engagement with the Bretton Woods institution.
- Chamisa under fire over US$120K donation
- Mavhunga puts DeMbare into Chibuku quarterfinals
- Pension funds bet on Cabora Bassa oilfields
- Councils defy govt fire tender directive
Keep Reading
This came after the government adopted the Zimbabwe Accelerated Arrears Clearance, Debt and Development Strategy (ZAADDS), a debt plan to deal with the country’s debt trap which has been blamed for disqualifying the Southern African country from accessing long-term capital.
The staff-monitored programme is an informal agreement between the IMF and authorities from a country to allow approved by the IMF to monitor the implementation of the authorities’ economic programme. The approval is the first agreement that the country has made in more than a decade.
Noble the development may be, the IMF was, however, quick to point out that the programme does not entail assistance or endorsement by the IMF executive.
“IMF staff will remain engaged with the authorities to monitor progress in the implementation of their economic programme, and will continue providing targeted technical assistance in order to support Zimbabwe’s capacity-building efforts and its adjustment and reform programme,” the IMF said in a statement.
In an interview World Bank country manager Nginya Mungai Lenneiye said: “Arrears clearance is the main issue. We want to see if Zimbabwe can embark on the road to recovery and we are watching the ministry and where the economy is going.”
Zimbabwe’s economy began a growth trajectory in 2009 when the country introduced the multicurrency system, becoming one of the fastest growing economies in the world. The economy took off at 5,4% in 2009, 9,6% in 2010, 10,6% in 2011 and 5,6% in 2012.
The inflation rate began at -7,7% in 2009, 2010 inflation was at 3%, 3,5% in 2011 and 2012 3,7.
The country managed to maintain inflation below its target of 5% in the past four years.
