Zimbabweans feel the pinch

HARARE - As economic and social fortunes continue to dwindle, the cost of living has become too high for the ordinary Zimbabwean.

A snap research carried out by the Daily News revealed that social infrastructure and other services are deteriorating while the liquidity crisis in the country has worsened from what it was four months back.

This is despite the fact that Zanu PF and President Robert Mugabe — who has ruled Zimbabwe for the past 33 years — vowed to improve the lives of people once elected.

In its election manifesto, aptly titled; Taking Back the Economy; Indigenise, Empower, Develop and Create Employment, Zanu PF promised to take people to the land flowing with milk and honey by creating a
$2 trillion economy.

The ruling party pledged to grow the economy by implementing socio-economic policies which would see the creation of at least 2,265 million jobs.

They also promised to increase the Gross Domestic Product (GDP) growth from 4,4 percent to 9 percent by 2018.

The new economic blue print Zimbabwe Socio-economic Transformation (Zimset) states that the economy will grow by an average of seven percent in the next five years.

But evidence on the ground suggests that people’s lives are not improving as 60 percent of the 13 million people living in Zimbabwe are said to be poor.

Of that figure, 16 percent are said to be extremely poor while 58 percent of families in Zimbabwe cannot afford to eat three meals a day.

This comes at a time when the country has been experiencing drought since the turn of the millennium.
UN  Food and Agriculture Organisation (FAO) estimates that 2,2 million people, which translates to about 1 in 4 families in rural Zimbabwe, are in urgent need of food aid.

Simbarashe Moyo, the Combined Harare Residents Association (CHRA) chairperson, said unless something is done soon, the country risks reverting to the hyperinflationary period scenarios of yesteryear.

“Generally it seems there is high possibility that we will return to the 2007-2008 situation where basic commodities were scarce and a lot of people succumbed to cholera,” he said.

Moyo noted that the increase in the number of companies that are shutting down was serious cause for concern in a country with one of the highest unemployment rate in the world at around 80 percent.

In its monthly economic review for August, 2013, the Reserve Bank Of Zimbabwe (RBZ) noted that on a month on month basis, broad money supply in Zimbabwe declined by 1,5 percent to $3 796,24 million in August, from $3 854,92 million in July 2013.

“The month on month decrease in broad money was on the back of withdrawals on most deposit classes.
“Major declines in deposits occurred at commercial banks, which registered net outflows across all deposit classes amounting to $56,08 million, during the month of August 2013,” said RBZ.

Post elections, banks slowed down on lending due to the high levels of non-performing loans and an uncertain economic environment as the new government is yet to define its economic road map.

Many banks are currently conservative and failing to meet the loan appetite from the public and private sector. The lending is estimated to have declined to below 55 percent.

As a result of the high perceived risk which has been magnified by political uncertainty, capital inflows into the country are mismatched with the demand for long term credit in the economy — resulting in a serious liquidity crisis.

Economist Christopher Mugaga said Zimbabwe is still suffering from a confidence crisis as evidenced by few people who are depositing their money in banks.

According to RBZ, 70 percent of the country’s 13 million people have no bank accounts.

“The liquidity crisis is also being made worse by a prolonged economic stagnation which is being confused with recovery,” he said adding that foreign investor apathy with Asian countries shunning capital intensive projects in the country has exacerbated the situation.

“The cycle from tobacco harvesting is also stretching a distant leaving the liquidity cycle following suit,” he said.

Mugaga asserts that the market could also be taking a position ahead of the budget statement — which is expected to be announced next month by the new Finance minister Patrick Chinamasa.

Comments (20)

i think people lack trust in the government. They feel that their money might be converted into Zim dollar. So unless they enact legislation to outlaw Gideon Gono's directives which are always of "with immediate effect" then no one will deposit

Makomuredhi - 21 October 2013

Our money will be turned into zudas, kuchengeta wega the best. ku bank kwacho inotodzoka yarohwa insted yekuti ive ne nterest.

Idi - 21 October 2013

Since we are beginning to see reality it is now time that we give focuss to our own local resources like the Chiadzwa diamonds and see how much revenue is being realised and make use of that money to prop up our economy so that at least people can have something to look forward to as the lecvels of poverty start showing its ugly head . We as a country will never learn because we were suppse to have paid half of the debt we owe IMF or World Bank by now . Its not a secret that the door was slammed on our face when our Finance Minister was told to pay up first before getting new lines of credit . However the only difficult thing is that as politicians they have people behind them who exxpect something from them as per their promise prior to March 31st elections . So in short apa pane nyaya and the only option is the one above where we need to use our own diamond wisely to cover the gap . This is a difficult ghost to deal with and we need to be very careful .

solomon chisoni - 21 October 2013

zanu-pf yazopererwa manje. apa makanyima mari ne IMF saka wats next???????

thahk - 21 October 2013

The confidence deficiency is the number 1 enemy for Zimbabwe. Even us Zimbabweans in the diaspora have lost confidence in that country's management. We have since stopped using banks to send money home lest it faces the Zanu PF greedy. Its either we send with relatives or we use western union. Zimbabwe is dead.

Exiled - 21 October 2013

Mugabe ndizvo, u can only appreciate him and what he says if u are in diaspora.varume hama tirikushushwa kunze kuno as blacks. pamberi ne zanu, zvichanaka chete pamberi na Mugabe Matibili. Mugabe is a good man.long live Bob

Emram dzemuto - 21 October 2013

@Emram Dzemuto- you say "tirikushushwa kunze kuno as blacks". Do you think you are going to be better off in Zimbabwe where you cannot even say anything negative about Mugabe? Why should the white people respect you when your own leaders dont respect you? So why dont you go back to Zim instead of staying kwauri kushushwa? The reality is you will starve within a few weeks because there are no jobs in Zim. So wake up my friend- Mugabe is not agood man- if he was our country would be prosperous.

Mazviona - 21 October 2013

The economic 'sickness' of Zimbabwe came immediately after Mugabe did the following: 1. Parcelled out 50 000 Zim rags in cash to the war-vets, 2. Sent soldiers and funded the war in DRC to try and help a weak Kabila, 3. When Zanu pf invaded farms, 4. When Mugabe & his cronies invaded Marage diamonds to build their mansions, 4. When the soldiers invaded wildlife sanctuaries, 5. When Gideon Gono printed more money to finance Zanu pf, 6. Of late when Zanu pf stole all gvt departments money to finance the rigging of elections. That kind of sickness will take many, many years to heal. It's not a simply story, Mugabe has been sitting on it knowingly. That 'sickness' does not come from the west, it is from within. So Zanu pf do not fool the nation with your story of sanctions. You are your worse enemies. So Zanu pf get down and queitly heal the wound you created on the nation!! Stop going to Singapore for your eye check!!

Gushungo Matibiri - 21 October 2013

GOOD ADVICE: Do something for yourself. Don't waste your time talking politics while others are enjoying their lives with money without politics. See how this Zimbabawean poor woman became a millionaire just by buying and selling cheap artificial diamonds to young people in cities. Very interesting. Go to ARTIFDIAMONDS.COM to see the methods and companies she was using to do that. ARTIFDIAMONDS.COM . Wake up Africans

Vada - 21 October 2013

@Gushungo Matibiri wabaya dede nemukanwa. Gross mismanagement, corruption, greediness and populist policies ndoauraya Zimbabwe. Musatinyaudze nezvemasanction when you created the mess yourselves imi maleaders.

welawela - 21 October 2013

@Gushungo Matibiri wabaya dede nemukanwa. Gross mismanagement, corruption, greediness and populist policies ndoauraya Zimbabwe. Musatinyaudze nezvemasanction when you created the mess yourselves imi maleaders.

welawela - 21 October 2013

Now that Nikuv got us this far, why dont they help us rig the economy as well. This is a half baked solution. This where we need help the most.

fokolo - 21 October 2013

The "whiteman" press is back in the land to the "whiteman" mode, the other day they were alleging that 800 companies with combined manpower of 8000 people had closed shop. When small shelf companies which have never operated with nomore than 10 employees, when they are de-registered the "whiteman" press will start spinning headlines. Where are stooges manufactured?

Mweni Tafara - 22 October 2013

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Farming Testimony - 22 October 2013

Mweni Tafara, go to the industrial sites and see what is happening before you go 'white' 'white' what has that to do with white. You have failed period and you are doomed to fail because you lost your trust and integrity long ago and it is very epensive to build trust. Your own people keep monies at home because they don't trust you, the foreigners will not invest in the country because they don't trust you so you are doomed. Ukada kurara nemukadzi wakamutaridza banga its called rape and its not a pleasurable game altogether. They rigged full time, they messed the economy full time, they have become corrupt full time, they have looted full time and have been brutal full time so what can you expect from them. Shelf companies do not pay a cent to NASSA but go there they will tell you how many companies no longer exist who used to contribute to it, check with medical aid societies that is when you will realise what is happening but as long as you sell bananas at the corner of Julius Nyerere and Robert Mugabe way you will never see what is happening all you do is try to protect that spot when better things could help you. You have been a menatl slave to ZanuPF for too long Mweni Tafara. You need exorcism.

Maita Manyuka - 22 October 2013

its a pity that i cant give back to the country that raised me up......not talking politics in any sense, but i seriously don't see things shaping up any time soon

Mumosken - 23 October 2013

The problem with the daily news is that it is full of misconceptions. It does not tell the truth as it is but manipulates information so that it suits its masters. How could you expect overnight changes in the economy and which economic models would you have implemented. Zvimwe tangaimafunga musati manyora.

non aligned - 23 October 2013

simple blacks vs blacks cause of whites! nyaya yemari,discipline has been lost in our society and politicians especially e mdc are in it for eir financial benefit if they had won then what yanga ichanaka zimbabwe? look at south africa vakuguta vachitambura, zimbabwe is for the brave ivo vakuti what will u do if u go back to zimbabwe hauna kuzvigadzirira hupenyu wako kumusha isu toenda kuzim wakasara!viva bob

mark - 23 October 2013

Well written story. Zimbabwe is not poor but corruption on the top guys and lack of transparent is the predicament. imagine 80% unemployed and its the only country not giving its elderly people few dollars per month. This is very bad for a country well blessed by God with gems. hey, some of these women were dancing what they said kongonya expecting better things from their leaders after a 33 year rule.

Bob - 25 October 2013

I was born in Zim and moved to the USA in 1980. I was only 10 years old when it happened and as a human being I miss my country. I am now a successful CEO of a technology company and would like to open a business in Zim. The problem is that it is really hard to invest in a country with so much going on. This is just an outside perspective. I don't live there, I don't follow the politics; this is just a perspective on a business decision that I thought might add value to the conversation.

Leam - 30 January 2014

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