THE World Bank (WB) has warned that Zimbabwe’s economy faces massive turmoil unless the country gets much-needed international assistance urgently, the Daily News reported.
This comes as the country is currently going through its worst economic crisis in a decade, as it battles acute shortages of foreign currency, fuel, electricity, medicines and water which has triggered unrest among long-suffering citizens.
In its latest report on Zimbabwe, the WB warned that inflation was likely to spiral out of control going forward evoking horrendous memories from 2008 when both businesses and the lives of ordinary people were destroyed by hyper-inflation.
“In the absence of international support, Zimbabwe’s macroeconomic challenges may persist. With dwindling reserves, there is a high-risk of the exchange rate overshooting, contributing to inflationary pressures,” it said.
The bank also warned that the worsening economic situation in the country was likely to lead to tensions which could derail President Emmerson Mnangagwa’s re-engagement efforts with the international community.
“One tenth of rural households currently indicate they are going without food for a whole day, about double the proportion of urban households.
“Climate related risks may constrain the recovery of the agriculture sector in the medium-term, exacerbating food insecurity.
“Social and political pressures could lead to policy slippage, delaying macro-economic stabilisation and political reforms.
“This might jeopardise the reform agenda under the IMF’s Staff Monitored Programme and delay the government’s re-engagement aspirations,” the WB added.
This report comes as tensions are rising in the country over the deteriorating political and economic situation, which is blamed on Mnangagwa and his under-pressure government.
As a result, many Zimbabweans including the church and the international community are ratcheting up pressure on Mnangagwa and opposition leader Nelson Chamisa to hold much-needed dialogue to save the country from descending into total chaos.
To illustrate the depth of suffering by ordinary Zimbabweans, the WB projected poverty levels in the country to widen this year, on
the back of soaring inflation and skyrocketing prices of basic consumer goods and services.
It predicted that extreme poverty would rise from 29 percent to 34 percent in 2019, meaning that there would be a further one million people living in dire conditions.
Last year the WB said about 4,7 million Zimbabweans were living in extreme poverty. This year, the number has jumped to 5,7 million.
“Continued cash shortages as well as weak targeting of public spending on social safety nets will continue to constrain social pro- grammes and the impact on poverty,” it added.
Mnangagwa, who was initially feted like a king when he replaced the late former president Robert Mugabe in November 2017 following a popular military coup is now facing severe criticism over his government’s stewardship of the country.
At the beginning of this month, he openly admitted that Zimbabwe’s economy was dead.
“I am aware of the pain being experienced by the poor and the marginalised. Fellow compatriots, getting the economy working again from being dead will require time, patience, unity of purpose and perseverance,” Mnangagwa said while opening Parliament.