Zimbabwe News and Internet Radio

Economy continues to slide backwards

By Tichaona Sibanda

The economic situation in the country continues to slide backwards, throwing more cold water on claims by President Robert Mugabe that it is improving.

Bankers Association of Zimbabwe (Baz) president, Sam Malaba
Bankers Association of Zimbabwe (Baz) president, Sam Malaba

Mugabe’s recent rosy prediction that the economy is on the bounce back is in stark contrast to a report by the Bankers Association of Zimbabwe (BAZ) that Zimbabwe will soon run out of money to sustain imports.

BAZ President Sam Malaba, in a speech read on his behalf at the Gweru Agricultural Show, said the country’s depressed economic performance was ominous, warning that Zimbabwe needed fresh money to shore up the economy.

Since the disputed elections in July last year, the ruling ZANU PF government has failed to attract the much-needed foreign direct investment, due to its disastrous economic and empowerment policies that have scared away investors.

Despite Mugabe ‘s lofty pre-election promises, a year into his new tenure alarm bells are ringing in every corner of the economy. Just this week reports emerged that the country will only produce 10,000 tonnes of wheat, the equivalent of a week’s supply of bread, as a major shortage looms.

This is one of the lowest tonnages ever produced by the country as it comes against a demand of at least 450,000 tonnes. Last year 24,700 tonnes of wheat were harvested, a far cry from the production levels of 325,000 tonnes registered prior to the chaotic land reform programme in 2000.

There are reports that bread sales have also dropped by more than half from a maximum of 1.5 million loaves a day to 700,000 per day as people have no money to buy bread.

The Grain Millers Association of Zimbabwe chairman, Tafadzwa Musarara, said as a result of the drop in bread sales and uncontrolled flour imports, the milling industry was currently overstocked with bread flour.

The government has long blamed such economic woes on targeted sanctions, but the EU sanctions that remain today only target Mugabe and his wife Grace.

Economist Isaac Dziya told SW Radio Africa on Wednesday that the only thing the government can do to reverse the economic downturn is to reform.

‘A lot of investors are more concerned by indigenisation laws, which require that black Zimbabweans own controlling stakes in companies. These should be reformed and the government needs to re-engage with West or the trend will continue to unprecedented levels,’ Dziya said. SW Radio Africa