Zimbabwe crisis deepens under President Emmerson Mnangagwa | Africa | DW | 29.07.2019
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Zimbabwe

Zimbabwe crisis deepens under President Emmerson Mnangagwa

Zimbabwe has struggled since longtime ruler Robert Mugabe's reign came to an end in 2017. Analysts describe President Emmerson Mnangagwa's first year in office as a period of indecisive and experimental policies.

Inflation in Zimbabwe has spiked at 175%, with fears of a return to the conditions of 2008, when the country recorded the world's highest rate for the year — with the percentages for some months in the hundreds of millions. The costs of living have once again become unbearable for most ordinary people. Food is more expensive, and aid organizations are expecting acute shortages as a result of crop failure after Cyclone Idai in March.

"Politicians have failed us. Our economy is down. There are no jobs," Hayden Sibanda, a bus attendant in central Harare, told DW. "Those available are not paying enough." 

Zimbabweans can hardly afford basic food, Sibanda said. "Most people are surviving on one meal a day," he added. "Breakfast is now a luxury. You eat once in the afternoon or evenings. One can probably sleep hungry." 

Read more: Zimbabwe shuts out foreign currency to tighten economy

An eventful year

Analysts describe President Emmerson Mnangagwa's first year in office as a period of indecisive and experimental policies.

It all started in January, when the government decided to increase the price of fuel by 130%. Then, Zimbabweans protested the price hike — along with increasing levels of poverty, the poor state of the economy, and declining standards of living.

Zimbabwe dollar in 2016 (Imago/Xinhua)

On June 24, authorities banned local trading in foreign currencies, including the US dollar

As the year progressed, several policy changes were effected without proper consultation. Chief among those decisions was the ban on the official use of the US dollar and other international currencies.

The government imposed the ban and announced the return of the Zimbabwe dollar, which had been abandoned following a dramatic loss in value in 2009. "The government has been experimenting with several policy measures," the Harare-based economist Prosper Chitambara told DW.

"They are behaving like a drowning person who is clutching at straws," Chitambara said, referring to the authorities. "Most of the policies that have been implemented are ad hoc, latching from one policy measure to another without addressing the structural policy impediments."

Power shortages

Watch video 01:32

Behind Zimbabwe's protests, a faltering economy

Zimbabwe is experiencing its worst energy crisis in decades, with rolling blackouts running for 18 hours per day. This has severely affected the small production in industries. Some companies are now resorting to a five-hour night shift, the only time when electricity is available.

The crisis is blamed on drought, which has affected the country's major hydro-power plant, as well as aging equipment at most of the coal-fired plants. Zimbabwe requires about 1,600 MW at peak periods but was only generating 1,400 MW before the crisis, with the deficit covered by imports from neighboring South Africa and Mozambique. To add insult to injury, the countries suspended exporting power to Zimbabwe, which owed the countries over $80 million (€72 million) total.

"Lack of constant power supply has dealt a big blow to the cost of doing business in Zimbabwe," Chitambara said, adding that it will have a negative perception on the country as a preferred investment destination.

The World Bank has already predicted -3% economic growth for Zimbabwe in the coming year — the lowest in southern Africa.

Lack of cohesion

Emmerson Mnangagwa and Robert Mugabe in Zimbabwe (Getty Images/AFP/J. Njikizana)

Two years after Mugabe's fall, Zimbabwe looks much the same, analysts say

Analysts cite lack of social cohesion as one of the most significant setbacks in reviving the country's economy. Though Mnangagwa has tried to woe international investors through his "Zimbabwe is open for business" rhetoric, this has yielded few results.  

Read more: Zimbabwe's President Mnangagwa 'not ready for genuine dialogue' 

The political analyst Alexander Rusero told DW that much of the slow progress boils down to a lack of confidence, both on the domestic front and internationally. "The issue of dialogue in my view becomes very important because Zimbabwe is a highly divided society," Rusero said. He added that no reasonable investor or government would believe in Mnangagwa — nor do almost half of Zimbabweans.

Mnangagwa's administration has asked for patience, maintaining that institutional changes will bring results soon.

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