PRESIDENT Robert Mugabe and his Zanu PF government’s commitment towards reviving the economy has been questioned with analysts arguing the ruling party is pre-occupied with factional fights at the expense of tangible reforms to steer the country towards recovery and growth.
After averaging 10% from 2009 to 2012, Zimbabwe’s economic growth fell to an estimated 3,3% in 2013 to end the economic rebound experienced since the end of hyperinflation in 2009, with World Bank projections pointing to a 4,2% growth in 2014 due to stubborn macro-economic challenges yet to be addressed.
After the 2014 Article IV Consultation with Zimbabwe under the Staff Monitored Programme (SMP) which ended on June 18, the IMF executive board reported Zimbabwe’s external position remains precarious with usable international reserves covering less than two weeks of imports.
Financial sector vulnerabilities persist, there is low capitalisation in industry and low liquidity amid political and policy uncertainty factors that have for long been noted as deterrents to investment inflows.
“Zimbabwe faces serious medium-term challenges and achieving sustainable, inclusive growth will require strong macro-economic and financial policies, an enabling business environment and normalised relations with creditors,” said the IMF in a press statement this week.
“Other risks relate to policy inconsistencies that could affect investment and financial sector vulnerabilities such as liquidity shortages and disorderly unwinding of troubled banks,” the IMF added.
Government’s sluggish response to factors affecting the economy which have resulted in successive extensions of the ongoing SMP, Harare-based economist Godfrey Kanyenze said, shows the ruling party is not committed to doing the right thing.
“We are already moving in the wrong direction after indications the government wants the SMP to be extended further beyond June 2014 because we are not doing what is supposed to be done,” said Kanyenze in an interview.
He said government has misguided priorities and is reluctant to deal with endemic corruption and bureaucracy which increase the cost of doing business or implementing real measures to cut the ballooning wage bill. “How can you have money to buy luxury vehicles for officials and not afford clean water?” asked Kanyenze.
The economist said government is focusing on factional fights and not bread and butter issues, adding factional-driven policies and discord among cabinet ministers worsened Zimbabwe’s performance in terms of policy consistency, clarity and coherence.
“There is discord and government is in a quandary because of the way it was constituted to balance factions. This is clearly not working because people are not singing from the same hymn book.”
Independent economist John Robertson said government spoiled its chance to meet the SMP when it granted civil servants a 26% wage rise earlier this year.
He said the economic challenges will persist until deliberate measures to boost production in agriculture, mining and industry are put in place.
“The same problems are identified time and again, but we have actually done almost nothing,” Robertson said.
He said the discord in government has ruined the country’s credibility.
“Investors cannot take us seriously,” Robertson said, adding proper policy formulation procedures should be followed.
“We have ministers thinking they can change laws by making a press statement. Clearly, parliament is being sidelined and I think the IMF would like to see that change.”