By John Kachembere
Zimbabwe’s severe cash shortages, which have seen banks rationing money, look set to inflict more damage on the economy in the coming months, with fuel and food shortages expected to worsen in line with the dying economy.
This comes as many of the imported basic consumer goods — which were banned by the out of sorts Zanu PF government in June this year, after it introduced Statutory Instrument (SI) 64 — have flooded the black market.
At the same time, ordinary Zimbabweans, anxious about the imminent introduction of bond notes, continue to swamp banks in a desperate bid to withdraw the scarce United States dollars.
All these dark clouds hanging over the country also come as the World Bank has just confirmed that Zimbabwe’s economy is dying, downgrading the country from its list of improved economies to the unflattering tier of struggling countries — as Harare’s political and economic turmoil continues to escalate.
Veteran economist John Robertson told the Daily News yesterday that the economy was set to hit more turbulence as government appeared decidedly clueless on how to arrest the rot.
“The country’s problems are not getting attention and nothing has changed except for the scarcity of fuel, which will soon be joined by many other things as money continues to run out. It will definitely get worse before it gets better,” he said.
Fuel shortages resurfaced this week, with many service stations particularly reporting limited supplies of diesel.
This has seen fuel retailers introducing limits on purchases, while some are only accepting prepaid cards for petrol and diesel — despite the panicking government’s vacuous assurances that the situation is under control.
“Of late, oil companies have been failing to access their money for fuel importation owing to foreign currency shortages which we are experiencing as a country. There is no need to panic or to be alarmist because the situation is under control,” Energy ministry permanent secretary Partson Mbiriri claimed earlier this week.
But Robertson warned that unless something dramatic happened, Zimbabweans should brace themselves for rough times ahead, characterised by massive shortages of basic commodities and increased power load-shedding.
“The government must quickly implement policy changes that can build confidence in the economy. At the moment all the main indicators suggest continuing shrinkage of the economy,” he said, citing poor farm harvests, falling manufacturing output, liquidity shortages, business closures and job losses.
Zimbabwe’s manufacturing industry, which used to employ more than 200 000 people, now accounts for less than 85 000 jobs and is operating at 34,3 percent, according to the Confederation of Zimbabwe Industries.
At least 4 600 businesses have closed shop in the past three years alone, according to the central bank.
In an ill-advised bid to halt cash shortages and support local industry, Industry and Commerce minister Mike Bimha banned the importation of basic consumer goods when he invoked (SI) 64 in June.
The move triggered a public backlash which saw deadly riots in the border town of Beitbridge where protesting small traders ran amok, torching a warehouse belonging to the Zimbabwe Revenue Authority (Zimra), destroying property worth hundreds of thousands of dollars in the process.
But despite the ban, most of the affected basic goods have since found their way to a thriving black market, amid serious allegations of corruption at the country’s porous borders.
And as the economy continues to tank, analysts have also pointed out that the government’s imminent introduction of bond notes is worsening the country’s cash crisis and triggering panic withdrawals from banks.
Meanwhile, Speaker of Parliament Jacob Mudenda has also waded into the bond notes debate by launching yet another thinly-veiled attack on the Reserve Bank of Zimbabwe.
“We really need to clean-up our policies even though it’s now (legality of bond notes) water under the bridge. It is the duty of the Reserve Bank to assure people that the bond note is not a dangerous animal.
“There is no law to back them, and if there is no law how can they become legal tender?” Mudenda thundered during an address to parliamentarians on Tuesday. Daily News