The economic collapse in Zimbabwe continues to deepen, with the government suspending publication of inflation figures until next February, and a prediction of at least a 3 per cent contraction in the economy overall – a recession. Electricity, water, cash, fuel and food are in short supply. Government moves to import more electricity, to pay public servants on time, and to resolve economic bottlenecks are just not enough to move the economy forward.
The Mnangagwa government continues to talk up its economic strategy, while the reality of power failures, fuel shortages, job losses and high inflation continues to hurt the community. The MDC and the trade union movement (ZCTU) are planning a new round of mass protests in response, in mid-August. In turn, government ministers have threatened military force to “crush” the protests. MDC refuses to accept the July 2018 national election result, and will not enter a dialogue with the government over a pathway to national recovery.
June 24 is the day that the Zimbabwe Dollar was reinstated and transactions in foreign currency were banned, as the Mnangagwa government struggled to eliminate price manipulation and black market currency exchange that has been fueling 100 per cent inflation. There was a run on banks as some citizens tried to withdrew foreign currency, but this abated after two days. The Zimbabwe Congress of Trade Unions and a teacher union threatened a strike unless the measure was withdrawn. Tajamuka threatened a five-day stayaway from July 1, to culminate in a mass protest.
Electricity shortages have added to the burden of high inflation – now 100 per cent - and cash shortages in Zimbabwe, provoking a nurses go-slow action and widespread calls for wages to be paid in US dollars. Threats of mass protests during June have not eventuated, perhaps partly because of pre-emptive arrests of activists, and neutralised by some progress on the national dialogue. Both US and EU diplomats have made encouraging statements about the government’s economic program and law reform program, and the Tripartite Negotiating Forum is taking shape.
Zimbabwe security forces have cracked down hard with the arrest of seven civil society activists returning to the country from workshops in Prague and the Maldives amid rumours of violent mass protests against the government in June. Statements from newly confirmed MDC President Nelson Chamisa and from the Zimbabwe Congress of Trade Unions promising big protests contributed to the tense atmosphere, while public patience has been severely stretched by ongoing electricity outages and skyrocketing fuel prices.
The MDC Congress due to be held in Gweru next week on May 24 appears to be a triumphal platform for Nelson Chamisa, and it appears he will use it to return to his demand that elected National President Mnangagwa share power with him, perhaps this time for the good of the country rather than Chamisa’s worn out claim that he won the July 2018 presidential election. On his part, Mnangagwa has launched a wider national dialogue, open to all stakeholders and not only political parties.
Cyclone Idai devastated the north-eastern part of Zimbabwe as well as Beira in Mozambique. Its impact exposed the weakness of the Zimbabwe economy and its government resources, and at the same time demonstrated the resilience of civil society to give practical solidarity. While the emergency response from the police and military was initially absent, these resources were also deployed properly when they came online, and with good cooperation with the civilian effort. There is a huge task ahead to rehabilitate Chimanimani, but this experience shows it could be done.
The recent Reserve Bank of Zimbabwe decision to combine all Bond Notes, Bond Coins and E Cash under the umbrella of “RTGS Dollars”, to set the exchange rate against the US dollar at 2.5:1, and allow it to float, is the most significant economic initiative of the Mnangagwa government. RTGS (Real Time Gross Settlement) dollars are now the official currency, and not the US dollar or other foreign currencies. This exchange rate is well above the real market rate for RTGS dollars of 3.8:1.
Underlying the sense of doom in Zimbabwe is the ongoing conflict between ousted President Mugabe and current President Mnangagwa. The economy and therefore the basic living conditions of the people can only go backwards while the struggle between these two forces works itself out. The return of President Mnangagwa to Harare instead of Davos on January 22 dramatised the failure of his “Open for Business” message, just as surely as the crisis of fuel shortages followed by the crisis of fuel taxes to overcome the smuggling of fuel and currency.
The MDC Alliance and the Zimbabwe Congress of Trade Unions late last week called for a “stay-away” of two, three and five days this week to peacefully demonstrate to the ZANU-PF Mnangagwa government that its economic policies had to change – mainly relating to fuel shortages, the use of Bond Notes and the need to pay workers in US dollars. Published calls emphasised “NO VIOLENCE”.
This call followed an attempt by MDC Alliance leader Nelson Chamisa to call mass protest rallies on November 29, 2018. It turned into a small rally and march, which presented a petition to parliament.