28 October 2018

Zimbabwe: Scapegoating Won't Solve Crisis

Photo: John Manzongo/The Herald
President Emmerson Mnangagwa greets David Parirenyatwa and Cleveria Chizema on arrival at a Politburo meeting in Harare on October 25, 2018.
editorial

President Emmerson Mnangagwa's claim that social media is to blame for the current economic meltdown has exposed the government's lack of appreciation of Zimbabwe's problems that now require decisive leadership.

Mnangagwa told the Zanu PF central committee last Thursday that "social media is driving deliberately panic buying whether it be fuel or other commodities".

He also insisted that the bond notes hold the same value as the United States dollar.

Finance minister Mthuli Ncube, who seems to be the only government official ready to admit the dire economic situation Zimbabwe finds itself in, had pointed out three weeks ago that the bond note was overvalued.

Ncube initiated the separation of foreign currency and real-time gross transfer system (RTGS) bank accounts to reflect that reality, but he was immediately forced to embrace the lie that the bond note remains at 1:1 with the US dollar after Zanu PF criticised his policies.

However, businesses had already reacted to the announcement and the exchange rates on the parallel market went through the roof, pushing prices of basic commodities beyond the reach of many.

Zimbabweans saw the red flags and started stocking up on basics fearing a return to the 2008 era where supermarket shelves remained empty for several months.

The government claimed the subsequent shortage of basic commodities was caused by panic buying, but most of the products that include sugar and cooking oil remain in short supply almost a month after the crisis set in.

Fuel queues that the government also tried to blame on panic buying have become a permanent feature in Zimbabwe's urban areas.

While the government stampedes for scapegoats, industry experts and economists repeatedly point out that the economic crisis is tied to the country's failure to generate enough foreign currency for imports.

There are also other important factors that landed us in this crisis such as uncontrolled government expenditure, a ballooning public debt and poor fiscal management.

For the problems to be addressed, there is need for the government to be sincere about the causes of the meltdown.

Blaming social media and trying to defy the rules of economics by insisting that a surrogate currency is at par with the US dollar will not make the problems go away.

Mnangagwa has to lead by example through pronouncements that reflect an understanding of the root cause of the economic problems and the solutions.

Bland excuses for government's failures on the economic front, like the one he tried to proffer at the Zanu PF meeting, do not inspire confidence among the sought-after investors and the governed.

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