18 April 2019

Zimbabwe: Zim @39 - 'Promised Land' Remains a Distant Mirage

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From inheriting a currency at par with the British pound sterling and stronger than the United States dollar, to not having a currency at all. From inheriting 18 planes from Air Rhodesia at Independence in 1980, to Air Zimbabwe flying one plane in 2019 -- that symbolises the journey Zimbabwe has travelled over the last 39 years of Independence.

Just a year short of 40 -- the number of years taken by the Biblical children of Israel to reach the Promised Land following perilous times in the wilderness -- Zimbabwe's Promised Land remains a distant mirage.

The thriving economy inherited from the colonial Rhodesian government has crumbled over the years with the future looking gloomy.

Just last week, the International Monetary Fund (IMF) warned Zimbabwe would slide into recession this year. Previous forecasts by the IMF had projected annual economic growth of at least 4,2%, but now the economy is seen contracting by as much as 5,2%.

Zimbabwe's US$8,2 billion 2019 national budget, presented by Finance minister Mthuli Ncube at a time the US dollar was officially trading at par with the country's quasi-currencies on November 22 last year, has effectively shrunk to RTGS$2,6 billion -- using the official rate -- due to currency and exchange rate volatility.

Government's failure to address the currency and exchange rate volatility has been the elephant in the living room, aggravating the chaos engulfing the economy and militating against investment.

At Independence, the country inherited the Rhodesian dollar worth US$1,50. It was one of the strongest currencies in the world.

Leadership failures and a cocktail of ruinous policies and practices, which include nepotism, patronage, corruption, breakdown of the rule of law, property rights violations, and a chaotic and often violent land reform programme, sunk the economy, while hyperinflation decimated the demonitised Zimbabwe dollar.

So bad was the inflation situation that Zimbabwe broke hyperinflation records in the 20th century -- notably Germany in the 1920s, Brazil in the 1980s, Argentina and Angola in the 1990s. By November 2008, Zimbabwe's highest monthly inflation peaked at 89,7 sextillion percent, according to leading economist Steve Hanke.

Zimbabwe would go on to adopt a multi-currency regime in 2009, after the Zimdollar became worthless, helping to steady the economy and putting a lid on inflation.

According to Hanke, Zimbabwe's annual inflation now stands at over 290%, although official estimates put the figure at just below 66,8%.

Food prices have soared beyond the reach of many at a time the World Food Programme (WFP) says urban poverty has risen significantly, with 1,5 million facing starvation this year. About 63% of Zimbabweans live below the poverty datum line, according to the UN agency.

This is a pale shadow of the country that former president Robert Mugabe inherited in 1980. Former Tanzanian leader Julius Nyerere told Mugabe in 1980 that Zimbabwe was "a jewel in Africa, do not tarnish it".

But 39 years down the line the jewel has become a blight on Africa, troubled by unending economic woes, wrecked by corruption which, according to Transparency International, cost the country US$1 billion annually through illicit financial flows.

President Emmerson Mnangagwa appears to be walking in Mugabe's footsteps on a familiar path to economic ruin.

At Independence, Ziscosteel was the envy of sub-Saharan Africa, producing steel essential for the country's infrastructural development, while the National Railways of Zimbabwe provided the wheels for economic growth, carrying tonnes of goods annually. Hwange Colliery Company was providing coal and coke to fire up the economy and help in the generation of much-needed electricity and steel.

The three companies have however virtually collapsed and are sinking in debt.

Investment into Zimbabwe has dwindled over the years because of toxic policies. Last year, the economy attracted US$470 million in foreign direct investment (FDI), making it one of the least attractive investment destinations in southern African.

Mozambique attracted US$2,3 billion in FDI while Zambia got US$1,1 billion.

University of London professor of World Politics Stephen Chan said Zimbabwe's 39th birthday was an anti-climax, adding that the southern African country had become a victim of its inward-looking policies.

"The 39th anniversary is in many ways an anti-climax. Zimbabwe could have done so much more. It was a case when inward-lookingness, a concentrated nationalism, forgot the role Zimbabwe could play in internationalism," Chan said. "It could have been a leading Sadc country, a leading peacekeeping nation, an example of democracy."

Chan said the violent land seizures had backfired on Zimbabwe, adding that the country needed youthful leadership to thrive.

"The land issue could have been solved by negotiation and a measured time frame. Everything is the result of leaders who looked inwardly and, as they aged, lost modernity and international relevance. At age 39, the country is still youthful, but aged leadership and old ideas have made it decrepit before its time," Chan said.

Political scientist Piers Pigou weighed in, saying: "Zimbabwe is a revolution that lost its way. A lot of promising ideas were put on the table; many could be resuscitated.

"Zimbabwe has forced a paradigm shift in thinking on land and possibilities for mass beneficiation. Sadly, it has also demonstrated an array of practices that should not be replicated in trends of such reform programmes."

Midlands State University (MSU) lecturer Ronald Chipaike says the country's foreign policy also played a role in Zimbabwe's dilemma.

"The country had a pragmatic foreign policy from Independence, but this agency and pragmatism waned in the face of isolation around 2000 as a result of human rights violations and the land reform issue. Recalibration of the Look East policy in 2003 was a desperate attempt to survive in the face of Western censure. Although it provided the ruling regime with a lifeline, it did not significantly benefit the nation as expected," Chipaike said.

Mnangagwa has been on an engagement drive, but his failure to implement far-reaching economic and political reforms has seen the country sliding back to repression and economic failure.

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