Business / Economy
Zimbabwean economy now drifting on autopilot
24 Oct 2014 at 08:55hrs | Views
AS First Lady Grace Mugabe seems to have taken over the running of the state and government behind the scenes while President Robert Mugabe looks to have lost control to his rabble-rousing wife, the economy has literally been left on autopilot.
The tumbling Zimbabwean economy is now in technical recession as evidenced by two successive quarters of negative growth.
Finance minister Patrick Chinamasa has slashed by half projected 2014 growth from 6,1% to 3,1%.
Amid the raging Zanu-PF infighting, which has now spilled into the public domain amid unprecedented inflammatory invectives by Grace against Vice-President Joice Mujuru - whom she is demanding must resign now or face dire consequences - the economy is hit by massive company closures, de-industrialisation, retrenchments, collapsing capacity utilisation and informalisation.
The country's trade deficit for the first nine months of the year was this week reported to be at US$2,84 billion arising from imports of US$4,65 billion against US$1,81 billion in exports, according to the Zimbabwe National Statistics Agency's latest figures. Government sustained a budget deficit of US$19,5 million due to a 6,3% tax revenue shrinkage as of August 31.
However, while the economy continues to sink deeper into recession, Mugabe, who is always keen on gallivanting abroad, is nowhere to be seen, while some of his cabinet ministers are following Grace's rallies and meetings - which have been reduced to Mujuru character assassination and humiliation events - during working hours as they try to ride on her coattails for political survival.
Ministers who have been consistently present in most Grace's rallies and meetings while not doing their work, include Jonathan Moyo, Saviour Kasukuwere, Ignatius Chombo and Super Mandiwanzira, among others. Even civil servants are now abandoning their jobs to attend the political rallies and meetings.
In the meantime, the economy is crumbling.
Recent findings by a Confederation of Zimbabwe Industries survey that the country's capacity utilisation has plummeted from 57,2% in 2011 to 36,3%, provide further evidence of an economy in serious trouble even though Zanu-PF leaders remain pre-occupied with internal power struggles.
Economic decline is further shown by retrenchments which have resulted in more than 5 000 workers losing their jobs this year so far alone, with an average 10 companies closing every month. This has resulted in shrinkage of government's revenues and a fiscal crisis demonstrated by its failure to pay civil servants on time.
In its latest report, Brussels-based think-tank, the International Crisis Group (ICG), says for Zimbabwe to avoid prolonged further uncertainty and possible renewal of a serious crisis, Zanu-PF should conclusively decide at its December congress who will replace Mugabe were he to be incapacitated or decide not to seek re-election in 2018.
The report also says Zimbabwe is now an insolvent and increasingly failing state which Mugabe (90) is failing to fix. Mugabe seems to have lost control as his wife runs rampage in the party and across the country, leaving a trail of fresh divisions and bitterness.
ICG says a year after general elections on July 31, Zimbabwe faces multiple social and economic problems, spawned by endemic governance failures compounded by a debilitating ruling party succession crisis.
"Zimbabwe is an insolvent and failing state, its politics zero-sum, its institutions hollowing out and its once vibrant economy moribund. A major culture-change is needed among political elites, as well as commitment to national as opposed to partisan and personal interests," it says.
Economist Godfrey Kanyenze said Zanu-PF's fixation with power struggles at the expense of the faltering economy is tantamount to "raising the middle finger to the people of Zimbabwe" when they demand delivery.
"All of them are focusing on power in the post-Mugabe era, yet people have no water, electricity and losing jobs and unemployment is worsening. They are really raising their middle finger to the people of Zimbabwe when they demand delivery. It's a complete disgrace. We need a new template; a new direction," he said.
Zanu-PF has so far dismally failed to fulfil its electoral promises, including creating 2,2 million jobs. Instead, the economy has descended into recession amid political turmoil worsened by fears Mugabe has lost control and things are now being run by his garrulous and belligerent wife.
University of Zimbabwe economist, Fanuel Hazvina, said the Zanu-PF power struggles will continue to wreak havoc with the economy as no serious investors would come on shores where policy uncertainty and political risk are consistently intensifying.
The tumbling Zimbabwean economy is now in technical recession as evidenced by two successive quarters of negative growth.
Finance minister Patrick Chinamasa has slashed by half projected 2014 growth from 6,1% to 3,1%.
Amid the raging Zanu-PF infighting, which has now spilled into the public domain amid unprecedented inflammatory invectives by Grace against Vice-President Joice Mujuru - whom she is demanding must resign now or face dire consequences - the economy is hit by massive company closures, de-industrialisation, retrenchments, collapsing capacity utilisation and informalisation.
The country's trade deficit for the first nine months of the year was this week reported to be at US$2,84 billion arising from imports of US$4,65 billion against US$1,81 billion in exports, according to the Zimbabwe National Statistics Agency's latest figures. Government sustained a budget deficit of US$19,5 million due to a 6,3% tax revenue shrinkage as of August 31.
However, while the economy continues to sink deeper into recession, Mugabe, who is always keen on gallivanting abroad, is nowhere to be seen, while some of his cabinet ministers are following Grace's rallies and meetings - which have been reduced to Mujuru character assassination and humiliation events - during working hours as they try to ride on her coattails for political survival.
Ministers who have been consistently present in most Grace's rallies and meetings while not doing their work, include Jonathan Moyo, Saviour Kasukuwere, Ignatius Chombo and Super Mandiwanzira, among others. Even civil servants are now abandoning their jobs to attend the political rallies and meetings.
In the meantime, the economy is crumbling.
Recent findings by a Confederation of Zimbabwe Industries survey that the country's capacity utilisation has plummeted from 57,2% in 2011 to 36,3%, provide further evidence of an economy in serious trouble even though Zanu-PF leaders remain pre-occupied with internal power struggles.
Economic decline is further shown by retrenchments which have resulted in more than 5 000 workers losing their jobs this year so far alone, with an average 10 companies closing every month. This has resulted in shrinkage of government's revenues and a fiscal crisis demonstrated by its failure to pay civil servants on time.
In its latest report, Brussels-based think-tank, the International Crisis Group (ICG), says for Zimbabwe to avoid prolonged further uncertainty and possible renewal of a serious crisis, Zanu-PF should conclusively decide at its December congress who will replace Mugabe were he to be incapacitated or decide not to seek re-election in 2018.
The report also says Zimbabwe is now an insolvent and increasingly failing state which Mugabe (90) is failing to fix. Mugabe seems to have lost control as his wife runs rampage in the party and across the country, leaving a trail of fresh divisions and bitterness.
ICG says a year after general elections on July 31, Zimbabwe faces multiple social and economic problems, spawned by endemic governance failures compounded by a debilitating ruling party succession crisis.
"Zimbabwe is an insolvent and failing state, its politics zero-sum, its institutions hollowing out and its once vibrant economy moribund. A major culture-change is needed among political elites, as well as commitment to national as opposed to partisan and personal interests," it says.
Economist Godfrey Kanyenze said Zanu-PF's fixation with power struggles at the expense of the faltering economy is tantamount to "raising the middle finger to the people of Zimbabwe" when they demand delivery.
"All of them are focusing on power in the post-Mugabe era, yet people have no water, electricity and losing jobs and unemployment is worsening. They are really raising their middle finger to the people of Zimbabwe when they demand delivery. It's a complete disgrace. We need a new template; a new direction," he said.
Zanu-PF has so far dismally failed to fulfil its electoral promises, including creating 2,2 million jobs. Instead, the economy has descended into recession amid political turmoil worsened by fears Mugabe has lost control and things are now being run by his garrulous and belligerent wife.
University of Zimbabwe economist, Fanuel Hazvina, said the Zanu-PF power struggles will continue to wreak havoc with the economy as no serious investors would come on shores where policy uncertainty and political risk are consistently intensifying.
Source - independent
