Stressed Zim on knife edge

HARARE - With the country teetering on the brink of another ginormous economic meltdown akin to the horror experienced in 2008, there are growing fears that ordinary Zimbabweans are becoming increasingly restless and that this could soon blow up into deadly riots.

Concerned analysts who spoke to the Daily News yesterday said the ongoing cash shortages and long bank queues, looming food shortages, the threatened ban on the importation of basic commodities, an inevitable rise in basic food prices and the broke government’s failure to pay angry civil servants their June salaries did not bode well for continuing peace and stability in the country.

They said it was telling that normally pliant and peace-loving Zimbabweans had rioted against the Zimbabwe Revenue Authority in Beitbridge at the weekend, after President Robert Mugabe’s cash-strapped government suddenly banned the importation of basic commodities — threatening the livelihood of tens of thousands of people and their families who live off street vending.

Economist Witness Chinyama said unless the government introduced measures to boost local industry — currently operating at a lowly 30 percent capacity — Zimbabweans should brace themselves for food shortages and massive hikes in the prices of basic commodities.

“A total embargo on the importation of basic goods will be painful to consumers who would be forced to buy local products at higher prices,” he said emphatically.

This was after Industry minister Mike Bimha evoked Statutory Instrument 64 of 2016 last Friday, banning the importation of coffee creamers, Camphor creams, white petroleum jellies, body creams, baked beans, potato crisps, cereals, bottled water, mayonnaise, salad cream, peanut butter, jam, maheu, canned fruits and vegetables, pizza bases, yoghurts, flavoured milk, dairy juice blends, ice-creams, cultured milk and cheese, among other products.

Chinyama said while the measures could breathe a new lease of life into local producers who were struggling to stay afloat due to stiff competition from imports, “in the absence of competition, chances are very high for local companies to effect price increases to match their high production costs”.

This was more so given that the recent import duty increase on cooking oil products had seen local retailers hiking their product prices from $2,99 per two litres, to an average of $3,60 as producers failed to meet demand.

Other economists have also previously warned that food prices were set to rise substantially due to looming shortages and the severe drought that has left more than 5,5 million people in need of food aid.

Veteran economist John Robertson was among those who said yesterday that the latest government intervention to ban the importation of some commodities would result in the acute shortage of basic goods, reminiscent of the 2008 era, as local companies had no capacity to fill the gap that was being filled by imports.

“Scarcity generates high prices and this often leads to a rise in black market, which will make life very difficult for ordinary citizens,” he said.

Robertson said the government should have put basic market fundamentals in place, to ensure that local industries were operating at full capacity before banning some imports.

“If we had enough time, perhaps industry could be revived, but that would all be dependent on fresh capital for retooling.

“Considering the fact that our government is broke and failing to meet its own wage bill, this capital can only come from foreign investors who, at this stage, would not want to hear about the indigenisation policy, government interference and lack of respect for property rights,” he said.

Other observers say Zanu PF’s seemingly unstoppable factional and succession wars have not helped matters, throwing spanners into the government’s half-baked programmes and thereby dealing a hammer blow to efforts to rescue the country’s dying economy.

Previously seen as a regional breadbasket, Zimbabwe’s fortunes have plummeted precipitously over the past two decades, to the extent that today the country is viewed as a much-derided basket case.

But Buy Zimbabwe chief economist Kipson Gundani said the government’s move to try and control the importation of basic goods would assist the country to balance its import bill.

“This timely intervention comes at a time when the country is suffering from the debilitating effects of an unsustainable import bill. It is common cause that a country that fails to rein in its import bill is surely and certainly digging its own grave.

“Even those who could import tonnes and tonnes of anything foreign are suddenly realising that without a thriving local economy that is supported by a robust industry, gains can only be short-lived,” he said.

So under pressure is the government, that Finance ministry permanent secretary Willard Manungo advised civil servants last week that their June pay dates had been moved to July, due to severe revenue under-performance — a dangerous situation that has caused discomfort, including among the country’s uniformed forces.

In 2008, some soldiers looted shops in Harare when their pay was delayed, at the height of Zimbabwe’s hyper-inflation crisis that was triggered by the government’s much-criticised fast track land reforms.

During that horror-laced period, inflation accelerated to more than 500 billion percent according to the International Monetary Fund.

Comments (18)

A noble idea at the wrong time. All what is being implemented by government should have been done long back before collapse of the industries. How can they now implement a policy on banning importing items that are not in the country? This really shows how slow our government ministers are on implementation of policies. The first think was to see that production has been boosted and there after start banning imports in percentages and not total ban.

moyomuchena - 22 June 2016

GDP 1980 - 2010 (30 years) combined: 21.30% GDP 1970 (1 year): 22.70% 1 Ian Smith year = 30 ZPF

Anthony Galtieri - 22 June 2016

@anthony.kkkk.I dnt know whr my little brother Truth is hybernating.he has all answers.

viola gwena - 22 June 2016

In this day and age, you do not sacrifice ordinary people to further private interests. For God's sake strong industries are built in a competitive landscape. All these lame excuses given by the ZANU PF thugs as economic policies are just hot air. The economy including ZANU PF itself are now on autopilot. ZANU PF thugs are now hallucinating and that is why they are seeing dissidents in themselves. Soon and very soon we will see fire. Zvakuzopera. We are witnessing the beginning of the end game. A People can not suffer forever. What is certain is that the endgame will be painful, typical of a plane dramatic fall, whose captain is a great grandfather who is 92 years old.

Zvichapera - 22 June 2016

The ZDF and all the security forces of Zimbabwe are the most stupid bunch I have seen in my life. They been paid nuts by the regime since Mugabe lost his mandate to rule in 2000, and went on to rig the elections ever since. The life of the military and the police have been in misery perhaps worse than during the war. After the Smith Regime the military and the police used to stay in decent accommodation, and receiving ration food and other goodies but they have since stopped. They used to afford rental or stay in barracks. They stay in informal settlements with no water, no electricity, or toilets. Yet their predicament is perpetuated by a person they protect and assist to stay in power against all odds. Their bosses are earning huge salaries and staying in mansions. If you check other military and police forces elsewhere they have good salaries and even their welfare is far better than Zimbabweans. SHAME TO ALL SECURITY FORCES OF ZIMBABWE. MUGABE IS TREATING YOU WORSE THAN DOGS YET YOU PROTECTING HIM LIKE A GOD.

amina - 22 June 2016

Zimbabweans must be very stupid, especially those that have voted Mugabe and as well those that throng Teurai Ropa's rallies. All this as reported was prophesied accurately in 2013. Did not the MDC demonstrate its abilities under highly constrained circumstances? Shame. We need rename the country Rhodesia, and request more investors and innovators from our caustic mother Britain. Until then, we shall cry and cry and cry.

david maombo - 22 June 2016

the kantry has been on the sword-edge for quite some time and no 'authority' cared about it! now they are trying to re-invent economics after they defied all voices of reason from corporates, opposition, churches & laymen alike! zim economy neva functioned on its own since 1980 and I dont know what these bullfrogs are trying to do by going solo in this global villa!

SaManyika Chaiye - 22 June 2016

the kantry has been on the sword-edge for quite some time and no 'authority' cared about it! now they are trying to re-invent economics after they defied all voices of reason from corporates, opposition, churches & laymen alike! zim economy neva functioned on its own since 1980 and I dont know what these bullfrogs are trying to do by going solo in this global villa!

SaManyika Chaiye - 22 June 2016

Its never too late for the authorities to do the right things 1stly ZIMRA is not doing enough especially the investigations department they have been sitting on cases with potential of a billion in revenues to the national fiscus from Banks which operated shelve companies and making billions without paying a cent to Zimra even now CABS which started operating as a commercial bank way back before dollerisation is making millions outside its core business of mortgage but Zimra is doing nothing. It is also not new to them that the Chinese have warehouses which are filled every 2 weeks but they do not contribute anything to the national revenue, they don't issue receipts on purchased goods ,they don't bank the money same with some Indian guys. The new board at the revenue authority should look at the Case managers in the investigation department to enquire why cases brought to them as far as 2012 with all documents for an expedited conclusion of cases haven't been finalised to date may be only to be told that the offender has since closed business.

Citizen - 22 June 2016

Regai henyu muone marovero atichaita vana vavo manje manje havadyi zvakabiwa izvozvo miromo yakazvimba kuita matende

Muzvindapanyo - 22 June 2016

@citizen .thank yu iwe.komborerwa.Zimra are only headstrong on local companies n indegn .they will rather shut dwn struggling local companies.Chinese n Pakistanies are left scot effort at all.Go to zimra offices,its only struggling local business pple crying for tax clearences n paying fines bt not even a chinese or indian seen at kurima house.Zimra is killing the economy.murder.

viola gwena - 22 June 2016

Noble if applied in a normal situation,there is likelihood that rent seeking is at its best in the present circumstances.Cronies are the beneficiaries of this type of import regime controls.

Gen. Spinola - 22 June 2016

@athoney@viola GDP is meaningless in a country like Zimbabwe where GDP per capita fell as low as $608 in 1993 rose to $899 in 1998 was down to $491 in 2008 and was up to $1070 in 2014 and is now down again. Zimbabwe economy is like a roller ride instead of a steady climb. This is what you should expect with no consistent economic policies, decisions taken at random without evaluation. Recent decision to ban goods overnight without taking into account that some of the goods had been bought and paid for and were being shipped. Who will invest in such a market where your new factory can be made illegal on day of opening. British govt used to fund BEAM project until president decided that he does not need their money, now we cannot afford to pay for the students on it. Closed diamonds industry which used to generate $30m a month to Zimra, now $1m in 4 months. Discourages DFI.

bexilford - 23 June 2016

Sure the country should be renamed Rhodesia. This is not independence.

Mush Mashy - 23 June 2016

ko importation of kids (vana) haina kunyorwawo wani

tongo - 23 June 2016

@Bexi.noted.good points bt yu need to explain what hapened in 2014, for such a rise.Dnt exagarate cz Truth is watching yu.

viola gwena - 23 June 2016

There will not be early elections in Zimbabwe regardless of how much suffering the general population will undergo. The only way is of new election is by death of Mugabe, Mnangagwa, Mpoko, Chidyausiku simultaneously.

amina - 23 June 2016

1960-70s turn back time and look what you have all been robbed of by mugabe and his cohorts, SO sad

keith - 28 June 2016

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