Zimbabwe: ED Celebrates 2nd Anniversary in Power Amid Economic Gridlock

(File photo).
27 August 2020

President Emmerson Mnangagwa today celebrated two years since his inauguration in August 2018 amid mixed feelings over successes recorded in overturning the country's economic fortunes.

One of the cornerstones of his 2018 election campaign was stabilization of the economy, tackling corruption, respecting property and human rights as well as opening Zimbabwe to external capital.

However, two years on, public sentiment over Mnangagwa's success so far remains highly contentious.

In a Twitter thread posted this morning, a buoyant Mnangagwa highlighted the successes recorded in the two years he has been in power.

"Two years ago today, I was inaugurated as your President. I vowed to serve Zimbabwe and its people so that we could move towards a more prosperous future," Mnangagwa posted.

Among the major highlights of projects done so far under his administration is the US $4.2 billion Great Dyke Platinum Mine already under construction following the President's visit to Russia last year which helped unlock the platinum deal.

Together with the US$4 billion Karo Resources Mhondoro-Ngezi platinum project fully on course will be key in also keeping the mining vision of attaining US$ 12 billion mining sector economy by 2023.

"Completed the Chiredzi-Tanganda Road, with the Makuti-Chirundu and Karoi-Binga roads currently under construction. - Implemented a new school curriculum, so that every student is accommodated for. -Compensation for former farm owners by 3.5 billion, ending years of disputes," Mnangagwa wrote.

In May this year, Mnangagwa's administration received recognition for its fiscal reforms and led to Zimbabwe being ranked third in Africa in terms of budget transparency by the Open Budget Survey (OBS) 2019.

On infrastructure development, government has made significant progress in various projects such as the expansion of the Robert Gabriel Mugabe Airport and various dam projects including Causeway, Gwayi-Shangani and Marovanyati currently under construction.

"From the economics side we have seen encouraging elimination of budget deficits although this came at some painful costs to citizens, workers and business (Austerity)," said economic analyst, Pepukai Chivore.

"In this vein, employment costs have been reduced from 96% to around 50% of revenue. This has created fiscal legroom for capital expenditure. As a result, noticeable infrastructural development includes Harare-Beitbridge Highway, Chiredzi-Tanganda, Karoi Binga, Makuti Chirundu roads," he added.

One of the major controversial policies the Mnangagwa administration has had to grapple with is de-dollarisation of the economy.

For the better part of the last two years, the government has failed to stabilize the local currency up until the past two months following the successful establishment of the foreign currency auction system which has somewhat brought stability to the Zimbabwe dollar.

However, the past two years have also exposed Mnangagwa in many ways.

Despite the Government opting to blame natural disasters like Cyclones Idai and Kenneth, and the Covid-19 pandemic for its economic blemishes, most of the challenges bedeviling the economy are arguably self-made.

Contrary to the promise that Zimbabwe will be open for business, Mnangagwa seem to have regressed from his key election thump card.

Recently, government suspended conglomerates, Seedco International, Old Mutual and PPC Limited from the Zimbabwe Stock Exchange on misguided advice that the companies' shares were being used to undermine the local currency.

The move has been widely criticized as a direct attack on foreign investments.

As a result, the ZSE since reopening over three weeks ago has seen foreign investors sell off and market capitalization on the exchange shrink 30 percent.

Under Mnangagwa, the ZSE value has withered to just below US$2 billion using the ruling exchange rate of ZWL$ 83/ USD from US$ 6.7 billion in 2017.

Since 2018, foreign direct investment figures have been depleting with FDI flows in 2019 dropping 65 percent to US$259 million from US$745 million recorded in 2018, the lowest position in nine years.

In July this year, official figures reflected that annual inflation reached a staggering 837.53 percent, the highest bout in as many years since dollarization in 2009.

Sadly, under Mnangagwa, Zimbabwe finds itself in familiar territory of international isolation from the global capital markets due to a series of negative human rights abuses since 2018.

In March, U.S. President Donald Trump extended by one year sanctions against Zimbabwe saying that the new government's policies continue to pose an "unusual and extraordinary" threat to U.S. foreign policy.

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