HomeAnalysisMnangagwa’s dire annus horribilis

Mnangagwa’s dire annus horribilis

EVEN if one is President Emmerson Mnangagwa’s family member, friend, crony, diehard supporter, or staunch political ally — as long as they have common sense and are not dishonest — they would admit that since he took over after the disputed elections slightly over a year ago, it has been a year of adversity; from manmade to natural disasters.

Editor’s Memo,Dumisani Muleya

A dispassionate assessment of Mnangagwa’s one-year tenure so far would show that Zimbabweans are now far worse off than they were when Mnangagwa came in; whether measuring from November 2017 after the military coup which toppled his predecessor Robert Mugabe or after the July 2018 controversial elections.

Using a salary baseline of a worker who earned RTGS$500 — US$500 then — the truth is that the same employee now takes home less than US$50 in real terms.

That salary has been dramatically eroded ten-fold. This means their disposable income and purchasing power have badly gone down. That implies low aggregate demand and falling production. The ordinary person has sunk deeper into poverty and suffering.

This is certainly the lived experiences of by far the majority of Zimbabweans. Of course, there are some who have benefitted immensely from Mnangagwa’s rule and are blind to reality, especially sycophantic cronies and corrupt networks around him.

Keynesian economics tells us, first of all, consumption depends upon disposable income. Second, disposable income and consumption have a symbiotic relationship; consumption increases with income growth. As income increases so too does spending and consumption. This affects aggregate demand and production.

For the purposes of fiscal planning, consumption expenditure is always considered as it is one of the central components of GDP. That’s why policy-makers review how consumption responds to income fluctuations. In macro-economics, consumption indeed depends on real income levels.

The opposite also holds true. If disposable income decreases, households — like those of most Zimbabweans now — have less money to spend and save.

The decrease in consumption in turn reduces aggregate demand and production, contributing to economic decline. Aggregate demand or domestic final demand — the total demand for final goods and services in an economy at a given time — is critical to economic performance.

This is what is happening in Zimbabwe now. Beyond this, economic problems are manifesting themselves through fuel and power shortages. These are wreaking havoc with the economy.

Inflation is also another indicator of how things have gone so bad. When Mnangagwa came in November 2017, inflation was at 31,01%. When he was elected last year in July, it was as low as 4,29%. However, it has now quickened to 175,6%. It opened the year at 56,9 % and six months later it has reached stratospheric levels.

Finance minister Mthuli Ncube yesterday suspended the release of annual inflation figures until February next year under the guise of inflation rebasing and other technicalities, effectively trying to hide away the ugly face of price escalations and economic meltdown. But he admitted negative economic growth and recession are now a reality.

On governance, human rights and corruption, as well as other pointers, the situation has also deteriorated.

Repression still remains. Political activists and human rights defenders continue to be hounded. Dissenting voices are being crushed, while innocent civilians have been maimed and killed in street protests.

Nothing has been done to bring offenders to justice and compensate victims, for instance, on the August 1, 2018 and January 2018 killings. The real tragedy is that those in the military responsible for the bloodshed have not been held to account.

The other issues are reforms and international isolation. Although government is pushing a broad reform agenda, it is largely piecemeal and superficial, let alone convincing and impactful.

The international community remains sceptical and wary. They are unwilling to underwrite the corrupt and incompetent Mnangagwa administration’s faltering project. All in all, it has undeniably been a disastrous year.

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