IN a two-block precinct in downtown Washington DC this week, the International Monetary Fund (IMF) convened a meeting which extensively discussed Zimbabwe’s economic crisis.
Diplomats from all over the world are always quick to emphasise how difficult it is to sit down and discuss matters to do with this country — not because Zimbabwe is the planet’s most important nation, but in view of the fact that it is a country endowed with amazing potential, but which, however, appears to perennially falter in the quest to maximise on its advantages.
What emerged from this week’s IMF gathering is a stark reminder that the serious problems facing this nation must now be resolved decisively in the national interest before the situation deteriorates to the point of no return.
The staff report of the IMF’s Article IV Consultation provides an unsettling glimpse into Zimbabwe’s tattered economy.The IMF is projecting what it describes as “near zero” economic growth for the country in 2020. This, by any measure, is catastrophic. While the international financier has elected to use diplomatic language in its appraisal of the economy, every self-respecting Zimbabwean must not hesitate to tell it as it is. From the very outset, the IMF chooses to characterise the situation as “an economic and humanitarian crisis”. But the man-made tragedy currently unfolding in this country is far worse than that.
The Zimbabwean tragedy is a culmination of deep-seated leadership failure. It is essentially a governance crisis arising from illegitimate politics. Despite touting itself as a reformist administration, the government has fared dismally in implementing much-needed reforms.
Unrestrained money supply growth has seen inflation shoot through the roof. Unworkable currency reforms have stoked the flames of turmoil, pushing the economy to the brink of utter chaos. An external debt overhang and the failure to adhere to public finance management rules has meant the country’s credit rating remains in junk territory. The vital indicators look dire. Prospects for economic growth are next to nil. Foreign direct investment is dwindling alarmingly.
Formal unemployment is at an all-time high. What is to be done? Poverty is endemic.
Well, although the IMF will not publicly say it, the big elephant in the room is the unresolved political question. There is no substitute for genuine, inclusive dialogue. Anything else is wishful thinking.
At the level of economic management, it is vital to ensure that fiscal and monetary policies are deployed in a seamless and efficient manner that delivers tangible results. The Staff-Monitored Programme clearly outlined the areas of concern. They include the need to tackle corruption and re-organisation of state-owned enterprises.
The saddest part of this tragedy is that the government knows what needs to be done, the international community knows what needs to be done and all the experts know what needs to be done. But why is nothing being done?