Zimbabwe's leader Mnangagwa begs for patience to fix ailing economy

Zimbabwean President Emmerson Mnangagwa. PHOTO | AFP 

In Summary

• Zimbabwe's economy has been badly suffering for two decades but the last 12 months have been the worst decline in 10 years, characterised by shortages of basic goods such as fuel and electricity.
• Annual inflation neared 300 percent in August, according to the International Monetary Fund.
• But Mnangagwa was upbeat in an annual speech to parliament, saying that his government's economic reforms "are beginning to bear fruit"

By AFP
More by this Author

Harare,

President Emmerson Mnangagwa has acknowledged the economic hardships Zimbabweans are suffering and pleaded for patience to allow his government to fix the country's rapidly deteriorating economy.

Zimbabwe's economy has been badly suffering for two decades but the last 12 months have been the worst decline in 10 years, characterised by shortages of basic goods such as fuel and electricity.

Even when such goods are available, they are often unaffordable for most Zimbabweans.

RECORD INFLATION

Annual inflation neared 300 percent in August, according to the International Monetary Fund.

The government has been introducing what economists have called "piecemeal" policies to raise revenue, fix currency distortions and increase cash liquidity.

But Mnangagwa was upbeat in an annual speech to parliament on Tuesday, saying that his government's economic reforms "are beginning to bear fruit".

"I am aware of the pain being experienced by the poor and the marginalised", but "getting the economy working again will require time, patience, unity of purpose and perseverance".

The local currency has fallen from parity against the American dollar to 16.5 Zimbabwean dollars (ZWL) since June, when the treasury introduced currency reforms in a bid to address the chronic monetary crisis.

The local unit briefly breached 20 against to the greenback last week before clawing back a little value.

"Last week's events of exchange rate manipulation amounts to economic sabotage and should not be tolerated," said Mnangagwa, referring the near crush of the currency which saw the central bank freeze bank accounts of a Zimbabwean company linked to global commodities trader Trafigura.

MOBILE MONEY

On Monday the central bank unexpectedly shut down the use of mobile phone banking for cash transactions, citing exorbitant commission fees.

Years of economic crisis have left the country short of bank notes and commercial banks have been rationing cash withdrawals to a maximum daily limit of 100 ZWL (US$10) per customer.

That limit has led many Zimbabweans to turn to electronic financial transactions as well as using mobile transfers to buy cash.

Mnangagwa said he was "fully aware of the challenges faced by the public in accessing cash, which has resulted in some unscrupulous traders selling cash in exchange for electronic money" and promised to fix the problem.

Nelson Chamisa, the leader of the main opposition party Movement for Democratic Change, said that a state-of-the-nation address "that does not address key issues facing the nation such as lack of electricity, water, fuel, non availability of cash, poor wages, human rights abuses, terror, abductions, illegitimacy and reforms is a waste of resources and an unprovoked insult".

"This invites us all to act!" Chamisa said after his lawmakers walked out of parliament shortly before Mnangagwa stood up to deliver his speech.

A UN special rapporteur Clement Nyaletsossi Voule visited Zimbabwe last week and concluded that "there is a serious deterioration of the political, economic and social environment since August 2018".

Mnangagwa won a July 30 election last year, taking over after 37 years of authoritarian rule under Zimbabwe's founding president Robert Mugabe, who died in hospital last month.