‘Cash crisis to trigger Mugabe exit’

By Ndakaziva Majaka

President Robert Mugabe could be forced out of office earlier than 2018 by Zimbabwe’s worsening cash and liquidity crisis, a US-based think tank has said.

In a September 19 newsletter, American publisher and global intelligence company, Strategic Forecasting, Inc (Stratfor), cautioned that without a plan to rehabilitate the economy, government was at risk of running out of money by the end of the year.

Zimbabwe is presently in the throes of a cash crisis which has seen thousands failing to access their hard-earned cash from various local banks.

The troubled nation is also battling political and social unrest as citizens take their 92-year-old leader head on.

“Without a realistic plan to rehabilitate its economy, Zimbabwe’s government runs a real risk of running out of money by the end of the year and increasing instability in the country ahead of its 2018 elections,” the think tank said.

Zimbabwe’s economic situation has been steadily deteriorating for some time now, with stiff economic headwinds including a devastating regional drought and a debilitating lack of cash flow having converged to create the country’s biggest challenge in years.

In June, the liquidity crunch worsened forcing the out-of-sorts government to impose import restrictions on certain basic items to stop the outflow of the greenback from the ailing economy.

“Meanwhile, the country’s $1,8 billion in outstanding debt — which it failed to repay by its self-imposed June deadline — continues to prevent international institutions such as the International Monetary Fund and African Development Bank from intervening.

“By all appearances, there is no end in sight for Zimbabwe’s financial troubles,” the American organisation said.

Stratfor noted that Mugabe’s recent move to overturn Finance minister Patrick Chinamasa’s civil service restructuring measures  —which were aimed at saving the country about $180 million by year end through a bonus suspension —was also going to accelerate his exit from power.

In his mid-term fiscal review statement Chinamasa’s prescription for sustainable expenditure, included taxing civil servants allowances with effect from October, along with a rationalisation of the county’s foreign service missions.

Zimbabwe -— presently drowning in a $623,2 million budget deficit as of June 30, against an annual projection of $150 million — was expected to save $155 million by the end of 2017 after axing 25 000 workers.

But, even after implementing all these measures, the country’s monthly wage bill was still going to remain high at $245 million, which is 76 percent of revenue.

However, barely a week after the measures, the country’s Information minister stated that Cabinet had rejected the unpopular plan.

The respected economists added that Zanu PF is “trying to set the stage for a smooth transition” so as to ensure that its opponents do not take advantage of its deep divisions.

“Though no clear successor has emerged from Zanu PF’s ranks, the party has consolidated and reorganised itself to strengthen its cohesion,” he said.

The institution pointed out that at the moment, the country’s security forces that Zanu PF has often relied upon are also wavering and divided.

“But even they (security forces) may be starting to crack under the financial crisis facing the country.

“As the government inches ever closer to the bottom of its coffers, the security forces will inevitably suffer, even if the government prioritises their salaries over others,” said Stratfor. Daily News