Zimbabwe’s economic revival remains a dream

When Zimbabwe’s President Emmerson Mnangagwa came to power almost six years ago after the military toppled long-time ruler Robert Mugabe, he promised to tackle the country's economic woes “head on”.

Yet for many, like 51-year-old widow Regina Ruona, the promised economic revival remains elusive.

After braving a chilly morning to join a long queue at a bank in the capital Harare to withdraw her late husband’s pension, a distraught Ruona is told bank notes have run out.

Bank note shortages are a symbol of the Mugabe-era financial ruin and have not been resolved under Mnangagwa, who is seeking a second term in the August 23 general election.

Ruona’s late husband’s monthly pension of Z$24,000 (R1,216) is barely enough to buy 2kg of sugar and 2l of cooking oil.

Her predicament is shared by millions of Zimbabweans struggling with rising prices after the local dollar, which was reintroduced in 2019, has weakened 85% this year and triggered another round of soaring inflation in a country that has regularly undergone hyperinflation blamed on decades of economic mismanagement.

At 101.3% year on year in July, Zimbabwe has one of the highest inflation rates, keeping company with the likes of Venezuela, Lebanon and Syria.

“The monthly pension should be in US dollars because the local currency does not buy anything,” Ruona said.

Unemployment remains high, with only 30% of Zimbabweans holding formal jobs.

During working hours, Harare’s pool parlours and sports betting halls teem with unemployed youth hoping for instant wins.

“There is nothing to do in the townships so we play pool for a living,” said Tendai Mubaiwa, a 33-year-old father of two. “We play three tournaments every week and winners can get up to US$250. I am now able to take care of my family.”

Independent economist Gift Mugano said the country’s dire economic conditions could galvanise voters against the ruling party in a manner reminiscent of the 2008 election. Then, Zanu-PF lost its parliamentary majority for the first time and Mugabe suffered a first round defeat to Morgan Tsvangirai before retaining power in a run-off marred by violence.

“It is only fair to mark Zanu-PF badly when it comes to the economy,” Mugano said. “We thought they had found a formula of how to run an economy, but the economy is not working.”

A government spokesperson didn’t immediately respond to requests for comment.

The government has insisted the economy is growing and projects 6% expansion this year, more than double the IMF and World Bank forecasts.

Debt woes

Mnangagwa has played up progress in areas such as infrastructure development, including a government-funded project fixing a 580km road connecting Harare to the main border with SA.

The government funds such projects as the country’s access to long-term international capital is blocked by its $14bn debt to foreign lenders including the World Bank and African Development Bank (AfDB). Almost half of that debt is in arrears.

Zimbabwe has also leant on China for infrastructure projects, including a $1bn 600MW coal-fired power plant expansion to help ease crippling power cuts that have hammered businesses and households.

AfDB president Akinwumi Adesina, who is leading Zimbabwe’s bid to restructure its debt, said in May that the restructuring efforts require the support of Western governments and largely depend on the coming election being free and fair.

Political analysts have warned that Zimbabwe could head for another disputed election, with the opposition being denied state media airtime and some of its rallies being blocked by the police.

Citizens Coalition for Change leader Nelson Chamisa, Mnangagwa’s main challenger, has promised to grow the economy, fight corruption and end the country’s isolation by the West over allegations of human rights abuses and electoral fraud.

Supporters of the ruling party say Chamisa hasn’t explained how he would fund his election promises, including grand infrastructure projects.

Reuters