Two months of ED and still no sign of economic turnaround
Two months after disputed general elections in Zimbabwe‚ President Emmerson Mnangagwa’s spirited efforts to turn around the economy are so far gaining limited traction.
His closest rival in the presidential race‚ Nelson Chamisa of the MDC Alliance‚ who got more than two million votes‚ quipped earlier this month that “you can change statistics of elections‚ but you cannot tamper with figures in economics”.
Chamisa has argued that Zimbabwe’s problems are owing to a political legitimacy crisis.
But Mnangagwa is hard at work. His international charm offensive has seen Britain engaged in talks with Harare to help revive the economy through the Lima Plan – the country’s debt and arrears clearance blueprint brought to light during former President Robert Mugabe’s rule in 2015.
Mnangagwa is also banking on China to help with a $2-billion bailout‚ despite failure to clinch the deal when he was in the oriental country for the Forum on China-Africa Co-operation (Focac) summit in Beijing.
However‚ for the ordinary man on the street‚ things are getting worse by the week – if not by the day. Prices of basic commodities are spiralling.
“It’s painful. But the good thing is that those that voted for Zanu PF are using the same money as us and are buying from the same shops and we earn the same money. We are all suffering‚” said Liberty Ncube‚ who is employed at a manufacturing company in the country’s second largest city‚ Bulawayo.
Zanu PF has admitted it is clueless about the reason behind the price increases.
“The party is failing to understand what is triggering the price hikes‚” the party’s political commissar‚ retired Brigadier-General Engelbert Rugeje‚ told members at a meeting in Bindura.
Before Rugeje’s admission‚ Zanu PF invited the MDC Alliance to an inter-party dialogue meant to resolve the economic crisis.
Last week a shortage of bread‚ a basic commodity‚ was announced by the Grain Millers Association of Zimbabwe. The situation has changed for the worse‚ as the association announced on Monday that biscuits and other confectionery products will not be getting an allocation of bread and self-raising flour for at least two weeks.
“Flour supplies remain critically low and it is therefore prudent that the available wheat stocks be maximised towards food security in respect of improving bread flour supplies and self-raising flour for home baking nationwide‚” an association statement read.
The cash crisis‚ on the other hand‚ has presented an advantage for Zambians‚ Malawians and Congolese who have easy access to the US dollar that has been pushed out of the market by bond notes. This because government insists that the bond notes are of the same value as the American dollar. When on the ground‚ the American dollar is worth more than 130 percent of the bond notes. As such‚ Zambians and Malawians in border towns now shop in Zimbabwe.
“They change hard currency into bond notes on the black market and that gives them more than a hundred percent more buying power. It becomes cheaper for them to buy in Zimbabwe than in Zambia‚” said a shop owner.
The biggest winners are truck drivers that move from South Africa right up to the Democratic Republic of Congo. They now buy fuel in Zimbabwe using bond notes instead of hard currencies.
“It works out cheaper. Diesel is selling for $1.34 and if I take that $1.34 and buy bond notes‚ instead of a litre of diesel‚ I get 2 litres‚” said a truck driver with Real Logistics.
On Monday‚ presenting his fiscal policy‚ Reserve Bank governor John Mangudya said that‚ with immediate effect‚ truckers should buy fuel with hard currency and shoppers – whom he referred to as cross-border traders – should also stop “rent-seeking behaviour”.
But for truckers‚ it’s a laughable demand.
“If a trucker buys in forex and the fuel attendant replaces the forex with bond notes‚ how will the governor know? It’s not like diesel speaks that it has been sold to a foreigner‚” said a trucker.
Zimbabweans with access to US dollars‚ mostly mineworkers‚ tobacco farmers and dealers‚ have found ways of keeping their money in stock.
“I am buying cars and parking them. When the situation normalises I will sell them at a reasonable going rate. It’s better than spending the money on consumables. When the crisis started I used to buy bricks up to a point when brick makers failed to meet demand‚” said Wayne Ngorima‚ an illegal forex trader.
The fiscal policy announced on Monday failed to get a buy-in from the worried public.