"The Year 2023 Will Be Very Dire For Zimbabwe" - Economists Pessimistic

8 months ago
Sun, 01 Jan 2023 13:06:13 GMT
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"The Year 2023 Will Be Very Dire For Zimbabwe" - Economists Pessimistic

Economists are pessimistic about 2023 saying the situation will be “dire” in Zimbabwe due to a number of factors including harmonised elections and spill-over effects of difficulties encountered in 2022.

During a visit to the southern African country in December, the International Monetary Fund (IMF) predicted a further fall in the gross domestic product (GDP) by 3.5 per cent in 2023.

The Breton Woods institution cited, among other things, “renewed domestic and external shocks (inflation surge, erratic rainfall, electricity shortages, and Russia’s war in Ukraine) … adversely affecting economic and social conditions.”

Analysts say years of economic mismanagement under Zimbabwe’s first leader, Robert Mugabe and later under his predecessor Emmerson Mnangagwa, have stymied the economy, further exacerbated by hyperinflation and the currency devaluing rapidly.

Gift Mugano, a visiting professor of economics at the University of Zimbabwe Business School, said the country’s 2023 economic outlook is gloomy. He told Al Jazeera:

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The year 2023 will be very dire, driven by spill-over effects of difficulties we encountered in 2022.

Zimbabwe is entering a very volatile social and economic period which needs level political minded leaders to handle this with care but I don’t see [the authorities] having that capacity to think straight in terms of management of the affairs of Zimbabwe

Some context:

1). In December, inflation in Zimbabwe peaked at 280 per cent, one of the highest rates globally. 

2). The Zimbabwean dollar also continues to weaken against the U.S. dollar. 

3.). Inflation and exchange rate could more than double by the second quarter of 2023 due to increased government spending.

4). The war in Ukraine and high inflation have also affected the agriculture sector which could plunge the nation into hunger and starvation.

5). Power cuts nationwide occasioned by reduced electricity generation have resulted in industries and households experiencing power outages that last for as much as 20 hours on a daily basis. Authorities hope refurbishment work at its Hwange Thermal Power Plant will add 300 megawatts to the national grid by the end of the first quarter of 2023.

6). Zimbabwe, which has traditionally relied on power imports from South Africa, Mozambique and Zambia, is now in a dilemma because the region is also grappling with an enormous power deficit.

7). It is almost certain that there will  be heightened political instability in the months leading to the polls and after, according to Rashweat Mukundu, a Harare-based independent political analyst. He said ZANU-PF will attempt as much as possible to stop any campaigns by the opposition be it in urban and rural areas using the security structures and also party militias.

Mukundu’s sentiments are shared by the Crisis Coalition of Zimbabwe which has warned that the coming election could become the bloodiest in Zimbabwe’s history.

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