Foreboding anxiety fills Zimbabweans

By The NewsDay | Jun. 16, 2014 | 3 Min read

ZIMBABWE’s economic outlook is spiraling downward in a deflationary vicious circle that is wrecking any chance of resurgence.

NEWSDAY EDITORIAL

Despite a vociferously proclaimed by President Robert Mugabe’s government, primary surplus, the economic outlook remains subdued and gloomy with the World Bank lowering Zimbabwe’s growth projections to 2% this year from 3% it had forecasted in April.

With unemployment hitting new highs, government has signaled a strong possibility of it failing to pay its 230 000-strong workforce timeously until December as the effects of a failing economy continues to bite. Regrettably, Zanu PF is majoring on trivial over who will succeed 90-year-old Mugabe.

Finance minister Patrick Chinamasa’s engagements with multi-lateral lenders have yielded nothing much putting Zimbabwe further into the economic quagmire as deflation and rising expenditures are cutting at what little available income is left.

Besides, Mugabe continues to gallivant on trips that do not necessarily benefit Zimbabwe. Although, Mugabe recently denied the growing unemployment rate it is clear that life is getting more and more expensive, as prices of consumables keep rising, and incomes keep shrinking. The situation belies the shrinking of gross domestic product and the inability of the economy to shirk off the crisis and rebound, in the near future.

It is imperative that Mugabe widen out for the benefit of citizens. He should understand the fact that incomes are dropping, while the level of personal debt remains at the same level means that homes and firms are unable to meet payments, causing shut downs and further unemployment, fueling an endless vicious circle. Last year, Zanu PF promised it would create value of $7,3 billion from the indigenisation of 1 138 companies across 14 key sectors of the economy.

The party aimed to generate over $1,8 trillion created from the idle value of empowerment assets unlocked from parastatals, local authorities and mineral rights.

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It said its various initiatives would create 2 265 million jobs across all economic sectors and “contribute to export earnings, food security and to the fiscus among many other benefits including urban housing, and construction on peri-urban farms acquired during the land reform exercise”. But 10 months later nothing seems to be moving leaving many unanswered questions. Growing political anxiety fills Zimbabwe with foreboding.

It is frightful that government appears clueless as evidenced by contradicting policy statements, especially on indigenisation –the prize of factional fighting in Zanu PF that has spilled into government.

It is compelling that Zanu PF must recognise (though belatedly) the scale of the economic crisis and an attempt at fiscal stimulus to finance infrastructure investment. It is pertinent to note the policy can take malevolent as well as benevolent forms.

There is no doubt that politicians, advised by deranged and culpable economists, will hasten, and intensify destructive economic policies to satisfy their egos. Suffice to say, it is those policies that will prolong and deepen the economic crisis.

Unless and until Mugabe gets real, and face reality economic prospects will remain bleak. It is therefore time for Zanu PF to stop blaming the victims – citizens or private sector for financial crisis authored by Mugabe’s party.

It’s time now to address the solution subordination of the economy to the interests of the citizenry and policies for employment creation. Only jobs can generate the income needed to revive the economy, to pay down private debts.

So if Mugabe wants to sleep at night he should do so by investing in the jobs needed to restore prosperity and stability as the private sector cannot. Only then will Zimbabwe be able to look forward, hopefully. Mugabe must not choose to be wrongheaded about causes of the economic meltdown, and therefore solutions.