HARARE – The World Bank this week made sad and disheartening projections of Zimbabwe’s moribund economy.
The international financier — which forecast Zimbabwe’s economic growth to decline from this year’s 2,7 percent to 0,9 percent next year and plummet further to 0,2 percent in 2019 — painted a gloomy picture of the country’s economic outlook.
The forecasts indicate nothing short of the decimation of Zimbabwe’s dying economy.
But of note, and crucially, the Bretton Woods institution insisted that President Robert Mugabe’s administration must urgently implement fiscal and structural reforms.
It warned that the much-hyped Command Agriculture, which has seen the country recording record yields in the 2016/17 agricultural season, after consecutive droughts in 2015 and 2014, is a short lived success.
That is scary!
In these volatile and unpredictable global climatic conditions, which Zimbabwe is very vulnerable to, it is unsustainable to rely on agriculture as the major economic driver.
The World Bank’s advice that Zimbabwe implements fiscal reforms and sound economic policies is not new.
Since the cornered country took a pragmatic approach by reengaging the international community, as it desperately took its begging bowl to global lenders, Mugabe’s government has been advised over and over again to stick to austerity measures, implement reforms and above all, be disciplined.
Those reforms — enforcing fiscal discipline, auditing the bloated civil service credible debt repayment plans, among others — will enable the investment-starved country to sustain a robust, long-term economic growth by reviving other key sectors such as mining and manufacturing, which are critical in breathing life in Zimbabwe’s dying economy.
While the agricultural sector used to be the backbone of Zimbabwe’s economy, today, the country can no longer entirely rely on it.
There is need for adaptation and for government to foster growth of other sectors.
Mugabe’s government must do away with populist policies and manage the country’s economy in a practical, accountable, consistent and transparent manner.
This also includes the government exercising great financial discipline and crucially, promoting policy consistency and clarity.
All this will boost investor confidence and trust and, in turn, attract the badly needed foreign direct investment. But this seems not to be the case.
The country’s affairs continue to be managed in a murky and muddled way, which does not inspire confidence, even among the locals who wish to invest.
For instance, after years of mining diamonds from Chiadzwa — without any meaningful economic development to show for it — Mugabe sprung a surprise by claiming that $15 billion in diamonds revenue had been stolen.
Interestingly, no one has been arrested since then.
That is the lack of accountability and transparency that has brought Zimbabwe’s economy to its knees.
And as long as the authorities continue on that path, which the World Bank and other respectable institutions warned against, Zimbabwe will be treading on slippery ground and will soon crash.