As Zimbabwe plunges into its worst economic crisis in a decade, gas lines are snaking for hours, prices are spiking and residents goggle as the new government insists that the country, somehow, has risen to middle-income status.
After ousting the repressive Robert Mugabe almost a year ago following more than three decades in power, and peacefully electing President Emmerson Mnangagwa in July, many hoped the country would emerge from turmoil and return to prosperity.
In the days leading to the implosion, new Finance Minister Mthuli Ncube, a former lecturer at the London School of Economics, announced the “stabilisation programme” that included commitments to cut borrowing. He also plans to cut government spending, repay foreign loans to unlock fresh credit and expand the revenue base.
Last week, Ncube surprised many by announcing that after rebasing the gross domestic product and taking into account the large informal sector, Zimbabwe is now a middle-income economy.
“Our economy is bigger than we think,” he told reporters, but he warned of “pain” to achieve desired growth. “At the end, we will be glad.”
But Zimbabweans have reacted angrily to one of the new measures, a tax on transactions conducted with mobile money and bank cards. Labour unions and others say the poor, without access to US dollars and largely reliant on electronic transfers, will be hardest hit.
Over the weekend long lines for fuel reappeared, sometimes stretching for several kilometers. Anxious residents rushed to stores, where prices skyrocketed for dwindling stock and shop workers began removing price stickers. People have started joining any line in sight.
“You ask what the queue is for later. The important thing is to get in the queue, there might be something there,” said Yvet Mlambo, a resident of the capital, Harare.
Basic items such as bottled water are now being rationed, even as the capital faces a cholera epidemic that has killed more than 40 people and spread into the countryside. Even beer is rationed, to some outrage.
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“At least allow us to drink. How else can we drown our sorrows?” one man shouted as he stared at a notice limiting customers to two beers per purchase. Drinkers have formed WhatsApp groups to share tips on where favourite brands can be found.
More worryingly, drugs are in short supply in a country where the health system has long been on the brink of collapse.
Outside a pharmacy, Bridget Chikwimba shook her head. “I bought these same allergy pills for a dollar last week, today they are $13,” she told The Associated Press. “I waited five minutes while they calculated the new price.”
Pharmacist Luckmore Bhunu in Harare confirms the drug shortage in Zimbabwe as many essential drugs, including those for diabetics and hypertensive patients, are unavailable. The country’s Retail Pharmacists Association describes the shortages of medicines as “severe”.
Several shops in Zimbabwe’s capital Harare have put up “closure signs” on their doors as the cash crunch deepens, signalling a worsening of the economic crisis epitomised by the return of fuel shortages last seen eight years ago.
Clothing store Edgars, eatery Teta, fast food outlets KFC and St Elmos Zimbabwe, as well as Corky’s Pub and Grill, have warned customers they were shutting up shop.In the midlands city of Gweru, Truworths and Topics have shut their doors with no indication they will open any time soon.
Some said the measure was temporary, while others said they needed to close their businesses to do deep cleaning and others cited renovation as the reason they were closing “until further notice”.
Zimbabwe is an economic bind, compounded by a lack of foreign currency to support its huge appetite for imports. Local industries are operating at a reduced capacity or have closed down altogether.
The banks long ran out of US dollars and have since converted the accounts of locals into “bond notes” – a pseudo-currency purportedly equal in value to the US dollar. Zimbabwe has not had its own currency since it decommissioned its dollar in 2009. Unemployment hovers around 90 percent. Heavily in debt and unable to pay its creditors, Zimbabwe’s government has found it increasingly difficult to secure loans from international lenders.
Prices of goods have shot up, bread is in short supply and the country is running out of drinks. Water is being rationed to just five bottles of 500ml per person. Cooking oil has hit the roof at R139 for a two-litre bottle, more than four times the cost in South Africa.
President Emerson Mnangagwa, has told his countrymen to brace for more pain. He said the new two percent tax imposed on all electronic transactions was a painful but necessary move to revive Zimbabwe’s failing economy.
Just a day after Mnangagwa’s pronouncement was when shops in the capital began shutting up, prompting a despondent citizen to tweet: “Why don’t they just shut down Zimbabwe for renovations?”
Many fear the current crisis, induced by foreign currency shortages and a ballooning debt, could spiral into the kind of collapse seen a decade ago when Zimbabwe’s hyperinflation reached 500 billion %, according to the International Monetary Fund.
Plastic bags of 100-trillion Zimbabwe dollar banknotes were not enough to buy basic groceries, forcing Mugabe to form a “unity government” with the opposition and adopt a multi-currency system.
Since then, daily transactions have been dominated by the US dollar. But the new currency shortage has forced most people to use a surrogate currency called bond notes, bank cards and mobile money, all of which are devaluing quickly against the US dollar on the black market.
Retailers said the soaring rates for US dollars on the black market, where they source most of their foreign currency, are making it difficult for them to restock. Some businesses have been forced to close.
“The parallel market is unsustainably high and has decimated confidence. Prices have been going up while margins are eroded,” Denford Mutashu, president of the Retailers Association of Zimbabwe, said.
Protests have erupted, and more are planned this week, as people say they can’t endure the economic pain any longer.
The crisis could lead to social unrest unless a political settlement is reached between the ruling Zanu-PF party and the opposition, which narrowly lost the presidential election and unsuccessfully challenged the results in court, said Harare-based political analyst Alexander Rusero.
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“Zanu-PF should swallow its pride to realise that they desperately need the opposition for the way forward,” Rusero said.
Both parties are instead playing hardball despite efforts by churches and others to bring them into negotiations.
Meanwhile, the popularity of the new president, who was cheered by thousands for replacing Mugabe, is dropping. Once-popular campaign slogans are being mocked.
The road to a more secure future in Zimbabwe is “long, winding and at times bumpy”, Mnangagwa replied in a statement posted on Twitter this week. “But there is no other way.”