News / National
Exodus continues as Zimbabwean economy lies in ruins ahead of elections
03 Jul 2023 at 02:02hrs | Views
Soaring inflation and collapsing ‘bond notes' are forcing more and more qualified people and professionals to flee the country.
Zimbabwe's poor economic performance and depreciation of the surrogate currency, among many other factors, is causing untold suffering.
Rural people have been especially hard-hit by the ever-rising cost of living and many have been forced to leave Zimbabwe ahead of general elections scheduled for 23 August.
Rueben Mutingwa, a qualified electrical engineer, has been training to be a caregiver in the UK to earn a living – joining many other professionals fleeing the crisis at home.
"I could not find a job in Zimbabwe. Those I went to university with are earning less than $300 per month and that is if one is lucky to get the job," Mutingwa told Daily Maverick by phone from Birmingham.
"So I decided to be a caregiver here… My wife will be joining me soon."
Hundreds of young people graduating from tertiary institutions cannot find work and many resort to selling and using drugs.
Public health workers and teachers say salaries of $300 and a lack of proper equipment make their jobs untenable.
Many businesses have closed in recent years and the country's main labour body, Zimbabwe Congress of Trade Unions, says the unemployment rate is 90%, though the Zimbabwe Statistical Agency puts it at 7.94%.
Desperate Zimbabweans are going to South Africa, Botswana, Namibia, Zambia, New Zealand, the UK and other countries.
"I could not access healthcare and could not pay school fees for my child; so I packed my bags and left," said Mutingwa.
In the past three weeks, "bond notes", as the currency is known, have lost more than 50% in value against the US dollar and other major currencies.
This has been disastrous for the likes of father-of-three Mishrod Jemedze (39) of Chiweshe communal lands, about 150km north of the capital, Harare.
Jemedze, who survives on growing maize and tobacco, says proceeds from the sale of crops are heavily eroded by inflation.
‘Could have bought me a car'
"I sold my maize and tobacco and I was paid partly in the local currency for my maize," he explains.
"I was surprised when I went to the nearby shops and all the money I earned from maize sales – that could have bought me a car at that moment – was not even enough to buy me three bags of fertiliser for the next cropping season.
"In the rural areas we do not have timeous updates on exchange market rates. It makes financial planning very difficult. We have to spend all our bond notes as soon as we get them to avoid a situation where the money loses its value in our pockets," says Jemedze.
The gap between the official and parallel currency exchange widens every day and the cost of living shoots up all the time.
The World Food Programme's Crop, Livestock and Fisheries Assessment Report indicates Zimbabwe will be cereal self-sufficient during the current consumption year (April 2023-March 2024) after an expected bumper harvest of 2.3 million metric tonnes for both livestock and human consumption.
But the country's annual consumer price inflation skyrocketed to 175% in June, from 86.5% the previous month, according to the Zimbabwe Statistical Agency, marking a continued deviation from the downward trend recorded since the beginning of 2023.
Zimbabwe's central bank governor John Mangudya said on 6 June he was raising the key lending rate by 10%, to 150%, to try to tame inflation.
As the 23 August elections approach, the leaders of political parties are making promises of economic revival.
‘Worse than Robert Mugabe'
President Emmerson Mnangagwa, seeking a second five-year term, says his Zanu-PF government has made significant strides in power generation and infrastructure development and has grown mining from $3-billion in 2018 to a predicted $12-billion in revenue by the end of this year.
Nelson Chamisa of Citizens Coalition for Change sounds a different note: "Mnangagwa has destroyed the economy in the last five years … more than what [former president Robert] Mugabe did in his 37 years in power. We will root out corruption in order for the country's economy to prosper."
Saviour Kasukuwere, a kingpin of Generation 40, a Zanu-PF faction that unsuccessfully campaigned for former first lady Grace Mugabe to succeed her husband until he was forced to resign, says only a unity government can save the economy.
Zimbabwe's economy nosedived when Mugabe embarked on chaotic land seizures in 2000 displacing about 4 500 white commercial farmers and leaving thousands of their employees without sources of income.
Kasukuwere has vowed to make sure that the national cake was shared by all Zimbabweans not a few with links to Mnangagwa.
Saviour Kasukuwere hopes to contest the August 23 elections as an independent candidate.
"We want everyone to benefit from the country's resources; we need to rebuild our economy by ensuring that the youth is involved in all economic development issues and this can only be done if we put responsible leadership in office," said Kasukuwere.
Masimba John Manyanya, a former chief economist in Zimbabwe's finance ministry, says the economic problems can only be solved by effective macroeconomic policies.
By contrast, Finance Minister Mthuli Ncube says Zimbabwe is doing all it can, including servicing its foreign debt, with a view to getting new lines of credit to help to revive the economy. "We hope to have cleared our foreign debt of about $14-billion by the end of 2025," said Ncube.
"The government shall create a debt redemption fund to service other external liabilities in line with the arrears clearance program. This will be funded through new levies and other resource mobilisation initiatives. The assumption of the external obligations by treasury and the implementation of non-inflationary financing of the liabilities, coupled by sourcing of additional resources, will go a long way in reducing money supply growth and its impact on exchange rate depreciation and price increases," he added
While politicians are promising heaven on earth and taking every available opportunity to outsmart each other, the big question is: Who among the presidential aspirants holds the keys to get Zimbabwe's economy working again?
Zimbabwe's poor economic performance and depreciation of the surrogate currency, among many other factors, is causing untold suffering.
Rural people have been especially hard-hit by the ever-rising cost of living and many have been forced to leave Zimbabwe ahead of general elections scheduled for 23 August.
Rueben Mutingwa, a qualified electrical engineer, has been training to be a caregiver in the UK to earn a living – joining many other professionals fleeing the crisis at home.
"I could not find a job in Zimbabwe. Those I went to university with are earning less than $300 per month and that is if one is lucky to get the job," Mutingwa told Daily Maverick by phone from Birmingham.
"So I decided to be a caregiver here… My wife will be joining me soon."
Hundreds of young people graduating from tertiary institutions cannot find work and many resort to selling and using drugs.
Public health workers and teachers say salaries of $300 and a lack of proper equipment make their jobs untenable.
Many businesses have closed in recent years and the country's main labour body, Zimbabwe Congress of Trade Unions, says the unemployment rate is 90%, though the Zimbabwe Statistical Agency puts it at 7.94%.
Desperate Zimbabweans are going to South Africa, Botswana, Namibia, Zambia, New Zealand, the UK and other countries.
"I could not access healthcare and could not pay school fees for my child; so I packed my bags and left," said Mutingwa.
In the past three weeks, "bond notes", as the currency is known, have lost more than 50% in value against the US dollar and other major currencies.
This has been disastrous for the likes of father-of-three Mishrod Jemedze (39) of Chiweshe communal lands, about 150km north of the capital, Harare.
Jemedze, who survives on growing maize and tobacco, says proceeds from the sale of crops are heavily eroded by inflation.
‘Could have bought me a car'
"I sold my maize and tobacco and I was paid partly in the local currency for my maize," he explains.
"I was surprised when I went to the nearby shops and all the money I earned from maize sales – that could have bought me a car at that moment – was not even enough to buy me three bags of fertiliser for the next cropping season.
"In the rural areas we do not have timeous updates on exchange market rates. It makes financial planning very difficult. We have to spend all our bond notes as soon as we get them to avoid a situation where the money loses its value in our pockets," says Jemedze.
The gap between the official and parallel currency exchange widens every day and the cost of living shoots up all the time.
The World Food Programme's Crop, Livestock and Fisheries Assessment Report indicates Zimbabwe will be cereal self-sufficient during the current consumption year (April 2023-March 2024) after an expected bumper harvest of 2.3 million metric tonnes for both livestock and human consumption.
But the country's annual consumer price inflation skyrocketed to 175% in June, from 86.5% the previous month, according to the Zimbabwe Statistical Agency, marking a continued deviation from the downward trend recorded since the beginning of 2023.
Zimbabwe's central bank governor John Mangudya said on 6 June he was raising the key lending rate by 10%, to 150%, to try to tame inflation.
As the 23 August elections approach, the leaders of political parties are making promises of economic revival.
‘Worse than Robert Mugabe'
President Emmerson Mnangagwa, seeking a second five-year term, says his Zanu-PF government has made significant strides in power generation and infrastructure development and has grown mining from $3-billion in 2018 to a predicted $12-billion in revenue by the end of this year.
Nelson Chamisa of Citizens Coalition for Change sounds a different note: "Mnangagwa has destroyed the economy in the last five years … more than what [former president Robert] Mugabe did in his 37 years in power. We will root out corruption in order for the country's economy to prosper."
Saviour Kasukuwere, a kingpin of Generation 40, a Zanu-PF faction that unsuccessfully campaigned for former first lady Grace Mugabe to succeed her husband until he was forced to resign, says only a unity government can save the economy.
Zimbabwe's economy nosedived when Mugabe embarked on chaotic land seizures in 2000 displacing about 4 500 white commercial farmers and leaving thousands of their employees without sources of income.
Kasukuwere has vowed to make sure that the national cake was shared by all Zimbabweans not a few with links to Mnangagwa.
Saviour Kasukuwere hopes to contest the August 23 elections as an independent candidate.
"We want everyone to benefit from the country's resources; we need to rebuild our economy by ensuring that the youth is involved in all economic development issues and this can only be done if we put responsible leadership in office," said Kasukuwere.
Masimba John Manyanya, a former chief economist in Zimbabwe's finance ministry, says the economic problems can only be solved by effective macroeconomic policies.
By contrast, Finance Minister Mthuli Ncube says Zimbabwe is doing all it can, including servicing its foreign debt, with a view to getting new lines of credit to help to revive the economy. "We hope to have cleared our foreign debt of about $14-billion by the end of 2025," said Ncube.
"The government shall create a debt redemption fund to service other external liabilities in line with the arrears clearance program. This will be funded through new levies and other resource mobilisation initiatives. The assumption of the external obligations by treasury and the implementation of non-inflationary financing of the liabilities, coupled by sourcing of additional resources, will go a long way in reducing money supply growth and its impact on exchange rate depreciation and price increases," he added
While politicians are promising heaven on earth and taking every available opportunity to outsmart each other, the big question is: Who among the presidential aspirants holds the keys to get Zimbabwe's economy working again?
Source - Daily Maverick
