BY TATIRA ZWINOIRA
UNITED STATES-BASED global think tank, Rand Corporation says there is a wide gap between President Emmerson Mnangagwa’s reform rhetoric and the reality on the ground, amid fears of economic collapse.
In its new report titled A New Zimbabwe? Assessing Continuity and Change After Mugabe’, the Rand Corporation said the Mnangagwa administration was not taking enough action on economic reforms.
“Although the Mnangagwa 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,” part of the new report reads.
“The government’s pledges have fallen short, as genuine reform has been extremely sluggish and repression has increased under Mnangagwa. These well-rehearsed slogans appear to be largely political theatre targeted at the international diplomatic community and investors.”
The Rand Corporation added: “Mnangagwa’s administration has moved on various piece-meal reforms in a few economic sectors, but progress has lagged or been non-existent in others”.
Rand Corporation found that an analysis of Mnangagwa’s economic record thus far shows that the fundamentals of the economy remain poor and that the results of a few “patchwork reforms” have not been promising.
“Despite a very brief government surplus and the introduction of a new currency aimed at easing a liquidity crunch and curbing inflation, the economy is again close to collapse, with fuel, bread, and electricity shortages reminiscent of Zimbabwe’s political and economic crisis in the late 2000s,” the report further reads.
It also states that Mnangagwa’s economic reform efforts are either incomplete or have fallen short across a variety of sectors, including the new currency regime, inflation, corruption, land, mining and privatisation.
“Zimbabwe’s large external debt burden of more than US$9 billion, a poor climate for investment and exceedingly high government wage expenses also hurt economic performance, as does policy inconsistency and a lack of reliable information from the government on financial, regulatory, and monetary policies,” read part of the report.
“Severe drought and devastation wrought by Cyclone Idai in March 2019 have further constrained the economy, with more than two million people facing starvation. In sum, Mnangagwa’s fragmented economic reform efforts have not been sufficient to arrest the sinking economy and instill confidence. A further indication that reform efforts are not meaningful is the lack of a returning diaspora.”
It added that in order to help support the country’s recovery from decades of mismanagement, corruption and State violence, international actors would be wise to push the government in a coordinated fashion to implement genuine political, economic and security reforms.
In the 2019 national budget, government projected an economic recovery of 3% for 2020, from a 6,5% contraction last year.
The growth is premised on better rainfall, continued fiscal and monetary discipline, substantial improvement in the balance of payments, better electricity supply and supportive tax and non-tax incentives to stimulate production.
The predicted growth is also premised on implementing ease of doing business reforms and increased investment by both government and the private sector.
Yet, despite these projections, consumer spending is fast shrinking.