News / National
Mugabe unlikely to get cash bailout from Zuma
07 Apr 2015 at 15:42hrs | Views
President Robert Mugabe is unlikely to get the bailout he allegedly seeks for his cash-strapped government on his visit to South Africa this week.
Analysts say this is because the SA government had lost faith in him and has its own people to look after. The visit is the latest in a string of lavish trips that have drawn criticism, as Mugabe battles economic meltdown since claiming re-election in 2013.
The visit will focus more on bilateral and "economic cooperation, including regional and continental matters", according to SA's Department of International Relations and Cooperation.
"SA has the capacity to bail out Zimbabwe, but it also has to take into account the needs of its own citizens," said political analyst Gabriel Shumba.
"It will never feel obligated to support a government which, despite being endowed with natural resources, continues to mismanage the country while repressing its people."
Mugabe had pinned hopes for funds to revive the economy on China and other eastern countries when he launched his campaign to retain power. But critics argue that the 91-year-old's "Look East" strategy has yielded little results. He also has failed to provide the 2.2 million jobs he promised in the run-up to the 2013 polls.
Mugabe has provoked anger among Zimbabweans living abroad after he recently requested their help to rebuild the country his policies destroyed. He previously had attacked them as "sellouts" for condemning his rule, while also scoffing at professionals who took up overseas menial jobs.
Shumba added: "Diasporans are open to assisting the country, but on condition that our government reforms and gives us the right to vote. We also need to be protected from politically motivated persecution and prosecution should we return home. Arrogance has no place in rebuilding Zimbabwe."
Patrick Chinamasa, the finance minister, has said Zimbabwe's economy would probably grow by 3.2 % in 2015, despite a shrinking tax base and lower investment.
It is a far cry when compared with the double-digit growth rates last seen between 2009 and mid-2013, during the MDC/Zanu-PF coalition government era.
Former Prime Minister Morgan Tvangirai's MDC issued a blistering attack against Mugabe's trip. Wangu Mazodze, the MDC-T South Africa spokesperson, said: "Mugabe's trip is not in the interest of Zimbabwe. He is now a native of the airports."
He argued Mugabe was an "illegitimate leader" and said if Pretoria wanted to offer him money, it should be on condition that he retired as president.
Economist John Robertson said the economy was in a serious state. "Now, requests for financial help seem certain to be high on the agenda during the closed-door meetings, he said, but SA faced so many competing funding demands that any offers to Zimbabwe might unsettle taxpayers and cause a political backlash.
Zimbabwe has adopted the greenback as official currency, so a weaker rand means less spending or saving power versus the US dollar for the diaspora's kith and kin.
Its depreciation will also stoke an influx of imported consumption goods which might cripple efforts to create jobs.
"The fall in the rand's buying power has been significant enough to cause serious downturns in private sector spending," Robertson stated. "Tobacco and cotton exports are performing badly, even more banks could fail and the prices of the two major exports, gold and platinum, are weak."
Zimbabwe's fragile banks are currently not able to lend enough money to industry. This has seen scores of companies shutting down while exports are falling, resulting in wider trade and current account deficits.
According to the Reserve Bank Zimbabwe (RBZ) data, the current account deficit was 25% of GDP last year, from 28.7 % in 2013. However, the 3.7 percentage point improvement does not impress when compared with the southern African region's average limit of less than 9% of GDP.
With declining exports and limited foreign exchange reserves at its disposal, the Zimbabwe government has found it hard to finance the shortfall.
The annual Purchasing Managers Index (PMI), a measure of the manufacturing sector's health, stood at 43.5% last year, the Confederation for Zimbabwe Industries (CZI) has said.
A PMI above 50 % suggests growth in the manufacturing sector, while a reading below 50 % points to a contraction. "My belief is that the economy could shrink 6% this year. I also do not believe that 3.1% growth was achieved in 2014," Robertson said.
Analysts say this is because the SA government had lost faith in him and has its own people to look after. The visit is the latest in a string of lavish trips that have drawn criticism, as Mugabe battles economic meltdown since claiming re-election in 2013.
The visit will focus more on bilateral and "economic cooperation, including regional and continental matters", according to SA's Department of International Relations and Cooperation.
"SA has the capacity to bail out Zimbabwe, but it also has to take into account the needs of its own citizens," said political analyst Gabriel Shumba.
"It will never feel obligated to support a government which, despite being endowed with natural resources, continues to mismanage the country while repressing its people."
Mugabe had pinned hopes for funds to revive the economy on China and other eastern countries when he launched his campaign to retain power. But critics argue that the 91-year-old's "Look East" strategy has yielded little results. He also has failed to provide the 2.2 million jobs he promised in the run-up to the 2013 polls.
Mugabe has provoked anger among Zimbabweans living abroad after he recently requested their help to rebuild the country his policies destroyed. He previously had attacked them as "sellouts" for condemning his rule, while also scoffing at professionals who took up overseas menial jobs.
Shumba added: "Diasporans are open to assisting the country, but on condition that our government reforms and gives us the right to vote. We also need to be protected from politically motivated persecution and prosecution should we return home. Arrogance has no place in rebuilding Zimbabwe."
Patrick Chinamasa, the finance minister, has said Zimbabwe's economy would probably grow by 3.2 % in 2015, despite a shrinking tax base and lower investment.
It is a far cry when compared with the double-digit growth rates last seen between 2009 and mid-2013, during the MDC/Zanu-PF coalition government era.
Former Prime Minister Morgan Tvangirai's MDC issued a blistering attack against Mugabe's trip. Wangu Mazodze, the MDC-T South Africa spokesperson, said: "Mugabe's trip is not in the interest of Zimbabwe. He is now a native of the airports."
He argued Mugabe was an "illegitimate leader" and said if Pretoria wanted to offer him money, it should be on condition that he retired as president.
Economist John Robertson said the economy was in a serious state. "Now, requests for financial help seem certain to be high on the agenda during the closed-door meetings, he said, but SA faced so many competing funding demands that any offers to Zimbabwe might unsettle taxpayers and cause a political backlash.
Zimbabwe has adopted the greenback as official currency, so a weaker rand means less spending or saving power versus the US dollar for the diaspora's kith and kin.
Its depreciation will also stoke an influx of imported consumption goods which might cripple efforts to create jobs.
"The fall in the rand's buying power has been significant enough to cause serious downturns in private sector spending," Robertson stated. "Tobacco and cotton exports are performing badly, even more banks could fail and the prices of the two major exports, gold and platinum, are weak."
Zimbabwe's fragile banks are currently not able to lend enough money to industry. This has seen scores of companies shutting down while exports are falling, resulting in wider trade and current account deficits.
According to the Reserve Bank Zimbabwe (RBZ) data, the current account deficit was 25% of GDP last year, from 28.7 % in 2013. However, the 3.7 percentage point improvement does not impress when compared with the southern African region's average limit of less than 9% of GDP.
With declining exports and limited foreign exchange reserves at its disposal, the Zimbabwe government has found it hard to finance the shortfall.
The annual Purchasing Managers Index (PMI), a measure of the manufacturing sector's health, stood at 43.5% last year, the Confederation for Zimbabwe Industries (CZI) has said.
A PMI above 50 % suggests growth in the manufacturing sector, while a reading below 50 % points to a contraction. "My belief is that the economy could shrink 6% this year. I also do not believe that 3.1% growth was achieved in 2014," Robertson said.
Source - zimbabwean
