Zim economy dying - World Bank

HARARE - The World Bank has confirmed that Zimbabwe’s economy is dying, downgrading the country from its list of improved economies to the unflattering tier of struggling countries, as Harare’s political and economic turmoil continues to escalate.

In its latest publication titled Africa’s Pulse, the Bretton Woods institution said the country had failed to register significant economic growth over the past few years.

“Zimbabwe’s fiscal deficit has deteriorated as remedial actions have been limited and this has resulted in the country registering a negative correlation between the cyclical components of government consumption and GDP,” it said.

Other fragile sub-Saharan states which were also placed in the same “falling behind” group included Burundi, the Comoros, Guinea, Lesotho and Swaziland.

This latest vote of no confidence in the country comes as Zimbabwe’s worsening economic situation has seen President Robert Mugabe’s government fighting hard to contain rising civil unrest that has resulted in violent clashes between ordinary citizens and authorities.

Analysts blame Zanu PF’s misrule and populist policies, such as its disastrous fast-track land reforms and the controversial indigenisation legislation for discouraging foreign direct investment inflows and causing massive company closures that have pushed the country’s unemployment rate above 90 percent, among a myriad other ills.

Economists have also said the government’s imminent introduction of bond notes is worsening the country’s cash crisis and triggering panic withdrawals from banks, with jittery Zimbabweans swamping financial institutions in their desperate bid to take out all their money ahead of the launch of the distrusted surrogate currency.

The Daily News established last week that the heightened demand for cash had forced stretched banks to reduce their withdrawal limits further — in some cases to as low as $20 per day — and in turn feeding into the growing fears that Zimbabwe has now completely run out of money.

This also comes as small American dollar denominations, including dirty and tattered notes, have disappeared from the market — amid speculation that the government is mopping up the scarce greenback ahead of the introduction of the bond notes early next month.

A banking source who spoke to the Daily News said the cash situation across the country had become “desperate”.

“We are down to our bare bones. There is no money, which is why we have had to reduce withdrawals further to as little as $20, to try and serve as many people as we can,” the source said.

Former Finance minister Tendai Biti said Zimbabwe was now in “a huge crisis”, adding that the further slashing of withdrawal limits was “a tell-tale sign”.

“The cash crisis is deepening, meaning that the banks’ margin of operation in respect of physical disbursement of cash has become limited and in some cases non-existent.

“Compounding the situation is the fact that the public is afraid of the bond notes and hence everyone who has a salary in the bank is rushing to get it out before the invasion of the notes.

“So we are in the middle of a banking storm because of the total collapse of the system emanating from a lack of trust by the public. The crisis will only get worse and the introduction of bond notes was always going to be suicidal on the part of government. It is the endgame,” the former treasury chief said.

“These are turbulent times in Zimbabwe, where escalating protests and rifts in the ruling Zanu PF party are eroding the tight grip that Mugabe has held since independence from white minority rule in 1980,” economic commentator Francis Mukora said.

“Chickens are now coming home to roost for Mugabe and his Zanu PF. The introduction of bond notes later this month will be the final nail on this economy,” he added.

In the meantime, the government’s quest to introduce the much-distrusted bond notes continues to face challenges.

After seeing her urgent application challenging the introduction of bond notes at the Constitutional Court thrown out on a technicality, former Vice President Joice Mujuru has since escalated her objections to the surrogate currency by asking the RBZ to reveal the law it will use to back their introduction.

At the same time, Harare businessman and known industrialist, Frederick Mutanda, has also filed a High Court suit challenging the procedure and legality of the bond notes.

 

Comments (18)

Icho.......to quote the corrupt Zimbaabwean Spin Doctor, "It does not need a rocket scientist to tell you that the Robbers and Muggers have looted the Simbabwean resources. Diamonds, Gold, Platinum, Marasha and everything that has to do with minerals. Gracelands in Mazowe, Hong Kong, Zvimba and other Asian countries including in ZhingZhong where "fockong products are produced for the poor Simbabweans. Air Zimbabwe, now Air Simbabwe has been hijacked and its now a private property for the Robbers and Muggers. I remember those days when there was a Boeing 737 coined "Jongwe" and this is the same move to take over other business planes meant to bring in mari for the airline and they will be flown by none other than the poor Koffie Olomide of Air Simbabwe, Simba Chikore. I guess the son in law is a son to the late ugly minister who looked like a Hippo from kumusha kwedu, Enos Chikoore.....Don't be flummoxed by those missing "oo" they are the same folks from the same family. By then, Enos was the Minister of Transport and made sure that his only beloved son. Simba become a pilot flying the dead coffins at Air Zimbabwe. The economy cant recover when ZANU PF is ruling...Never in a thousand years will Zim economy recover in the hands of the Robbers and Muggers. Unless there is a coaliation. GNU yes but not with the Robbers and Muggers. Icho vachamama chete muzita raJesu

Clemence Tashaya - 11 October 2016

Corruption is our biggest enermy.we are heading for disaster.The bondnote is temperal, wth the likes of Moyos n kasukuweres dipping in all jars .Solar energy needs seriouse look n returnder all for the jobs and energy.The 700 000 jobs from energy sector must be emphasised.Start on this sector and money will come in.Allow Standard Bank n Baclays to run the tenders n scout for offshore cash to initiate these projects.The bond notes will then be appreciated as they will be earned thru work ,not speculation .So when Vp Ngwena starts on corruption as he has now,we must bury our differences on politics n support him 100p.c.

viola gwena - 11 October 2016

It is dead, nit dying. Deepest level of deflation in the world: -3/8%. No bond market, stock exchange that made $120 in a day,

Anthony Galtieri - 11 October 2016

Instead of punishing corrupt people your party aunt defends and reward corrupt people. The fish rots from the head .The most corrupt is the head of state himself followed by his deputies in that order .Corruption in this country has become ubiquitous and the panacea lies in removing the corrupt party ZANUPF as everyone in that party is corrupt.

Aluta Continua - 11 October 2016

economy is dead and zanu pf regime is feeding itself the rotten carcass that was once thriving economy.

X-MAN IV - 11 October 2016

@aluta.We gonna have to start from smewhr,some how.1st step is to allow police to do their job wthout hinderence.If its ngwena who wants to tackle corruption then be it.Let him do it ,for us.Otherwise noone will do it.Coz our country is corrupt to the borne.Look at our prisoners,skeletons.The desperation of a country is measured by the condition of its prisoners.We need to pull ourselves n start up.I believe Ngwena will do it.He will rootout corruption,.He will stimulate industry.He wont steal .He has never invaded a farm,never applied for warvet compernsation, he has never applied for a free housing loan.He is not a holy man.But for now he is our best chance.

viola gwena - 11 October 2016

@ viola stop this ngwena shit nxa lalizekana empini do not try and impose this murderer on us. Go ahead lizekana but spare us that crap msunu wakho Mani. Let us have democratic elections and c if your preferred skunk will win anything . stop lecturing us about bloody ngwena wakho lowo fuseki mani

Ndoda - 11 October 2016

The Truth is : The Zimbabwe Economy is dying because of and with President Mugabe. Its so sad. Zwinorwadza izwi.

Sekuru Ndoronga - 11 October 2016

@ aunt I also have respect for Ngwena but my misgiving is he has been in the govt presiding over the rot for a good 36 years what new will he do? There is well documented corruption by the likes of Chombo ,ChIYANGWA ,Supa Mudenge Mr 52 bedroomed house and musoro razor but these people are occupying strategic positions in both the party and govt. Stands meant for youth were abused .Zimdef money was used to buy bicycles I can go on and on but its in the public domain that ZANUPF IS CORRUPT TO THE CORE.

Aluta Continua - 11 October 2016

Everyone in Zanu and government is corrupt. Everyone has to be rooted out if this country is to move ahead. We need to start from scratch without zanu from the picture

pride - 11 October 2016

I agree Aluta.we have sunk deep as a nation bt we need now to rise and get our country running.Mugabe is very old .He has nothing for the future.Spending tyme thinking the worst about him Is a waste of tyme.Production is needed ,timeuosly.Men need work ,jobs ,jobs n jobs.We must put hatred aside and get our country going.Elections or not ,we dnt need killings.we need so@utions to rise.I see non other than Ngwena who can work tgether wth Tsvangirai on stability.

viola gwena - 11 October 2016

For sure the economy has been destroyed by looters at the face of the head of state. United we stand divided we fall. Democracy is not practiced in the ruling party. Lip service has overtaken the events.Looters looted everything now they want to loot people.

Gumandafa - 11 October 2016

Sisy Viola....now you are talking. We are tired of the same old people who are always oppressing, repressing and suppressing us the young generation. We are also tired of the bile spewing of the Robbers and Muggers. The whole ZANU PF hapana mutswena apa...hence vanwe vana Francis Nhema and others who were seen to be sympathetic to Amai Dr Mujuru were fired all cz of the Mugabe dynasty and l mean the Gracelands. Of course , Croc can take over but he has lost his integrity because of the Robbers and Muggers although he has enemies within his party. He is becoming irrelevant day by day because vanhu havachada nekunzwa nezveZANU PF. Let him cross the road to the opposition and l bet with my last dollar, Croc will get the support. Let him be fired from ZANU PF and you will hear some good news from the war veterans themselves but it seems the opposition will win......this time...chakachaya. You know what, ZANU PF and its minions are looting because they know come next elections, they will be chaos and clashes and disputes. The last kicks of a dying horse. Let them loot but we shall arrest them and follow them wherever they might go. Zimbos are everywhere in the world and there no where for them to hide. Even Grace might try to run away to the Asian countries like what other dictators have done, but as Zimbos, we shall take back what belongs to a Zimbabwean and the family of the Robbers and Muggers will bear the same fate....Vachamama chete muzita raJesu

Clemence Tashaya - 11 October 2016

@aunt I appreciate your arguments our major set back has been lack of renewal in the party and the party needs to expeditiously address this pertinent issue.

Aluta Continua - 11 October 2016

The World Bank has only recently woken up to the fact that Zimbabwe is dying - this started in 2000 and why has it taken them so long to speak out !?

nelson moyo - 12 October 2016

izvi zvakutoda ngwena .And i write in my personal capacity asking cde ngwena kuti putitsai mbavha idzi. Mu ZANU ndimi mega masara munotyisa zvekuti mukataura kana kuti saa munoteererwa. Cde Ngwena i am a big supporter of you and belive iron fist yenyu seya josef stalin ndiyo yega inogona kumbo clipper ma wings e zvimbwasungata izvi zvakungoba.PLIZ CDE NGWENA PLIZ TAKAMIRIRA KUNZWA KWAMURI MUCHITI MBAVHA NGADZIURAIWE MUWONE KUTI SHUWA SHUWA HERE HADZIFE

NUTTY DREADLOCK - 12 October 2016

NELSON MOYO THE WORLD BANK FORECASTED THIS GORE RAKAPIHWA MA WAR VETERANS MARI AND BLACK FRIDAY OCCURED INDUSTRIAL INDEX FALLING AND MINING INDEX FALLING GDP =ZERO OR NON AT ALL. IT IS THE IGNORANCE OF THIS GOVERNMENT IN THAT TTHEY KNEW VERY WELL WHAT WAS GOING TO HAPPEN.SO STARTING FROM 1999 ONWARDS FLAGRANT LOOTING STARTED TO HAPPEN.IN HARARE CXASE THE TOWN DIED THE YEAR RAKAITWA SOLOMON TAVENGWA MAYOR

NUTTY DREADLOCK - 12 October 2016

#GRAND COALITION... Lets start this hashtag on social media!

Young Zimbo - 13 October 2016

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