‘No magic wand’ for blanket devastation
– Every time Chareka Mutungwazi, 76, tries to collect his pension money, he spends the night, like scores of others, sleeping outside a bank in Harare.
He is lucky if he is allowed to take out just $20 (about R300) of his monthly pension, as banks limit withdrawals due to the cash shortage – a symptom of the country’s economic collapse.
For most Zimbabweans, incoming president Emmerson Mnangagwa has only one priority: rebuilding an economy shattered by policies that threw out investors, destroyed the key agricultural sector and left almost everyone unemployed.
“I have to sleep in the queue if I want to get money. I came here last night and this is not good,” Mutungwazi told AFP, wincing as he shifted to find a more comfort-
Harare
able position on the pavement.
The shortage of banknotes is a legacy of the hyperinflation 10 years ago that forced the government to abandon the Zimbabwean dollar.
Since then, the economy has survived on scarce US dollar notes – often used until they fall apart – and for the past year also a parallel “bond note” currency that is pegged to the US dollar but widely distrusted.
The World Bank estimates that 2.8 million people, or 17.5% of the population, are short of food, and says paying public wages sucks up a staggering 87% of government revenue.
Zimbabwe’s unemployment level is generally put at over 90%, while the size of the economy has halved since 2000, when many white-owned farms were seized.
Mnangagwa addressed the unemployment crisis on Wednesday, saying: “We want to grow our country. We want jobs, jobs, jobs!”
Anger at bond notes was a driving force behind protests last year, while rocketing prices have returned in recent months, adding to the pressure that finally forced the military to take over.
The country does have economic strengths, especially in tobacco, cotton and mining, and Mugabe’s fall could offer the chance to open the taps for funding from overseas donors like the International Monetary Fund (IMF).
But local economists like Tony Hawkins, a professor at the University of Zimbabwe, warned: “Lenders like the IMF want reforms. They will say trim the civil services, cut the wage bill. None of these can be achieved overnight.
“If Mnangagwa cuts civil servants salaries, he is going to lose his support.
“We have no money in the banks, we have a huge budget deficit.”–