Zimbabwe’s economy is caught in a major downturn with shortages of fuel, medicine, and currency, as well as hyperinflation which has seen many families living on a single meal a day.
A token currency issued in Zimbabwe this week to ease critical cash shortages has brought little relief as desperate customers queue for hours to withdraw money while some traders reject the new notes. The central bank on November 28, 2016 issued $10 million in US dollar-equivalent “bond notes”, ignoring resistance from citizens and companies who feared a return to the days of hyperinflation.
/ AFP PHOTO / Jekesai Njikizana
Supporters of President Emmerson Mnangagwa, who came to power after longtime ruler Robert Mugabe was deposed in late 2017, had hoped he would be able to revive the economy quickly. But that has failed to materialize. Mnangagwa has pleaded for more time and patience from his countrymen, even as inflation continues to skyrocket.
On Wednesday quadrupled electricity tariffs amid crippling power shortages which have plunged parts of the country into darkness for up to 18 hours as the economy lurches deeper into crisis. The government stopped publishing inflation figures after they peaked at 176% in June. The International Monetary Fund has estimated that inflation hit 300% in August.
The US dollar had been the national currency since 2009 when the country dropped its own currency following hyperinflation of as much as 500 billion percent.
This is the second increase in three months, following one in August.
Around 7.5 million people around half of the population in both rural and urban areas would require food aid between by March next year due to a severe drought, according to the government the UN statistics. In January, Mnangagwa announced a more than 100 percent hike in fuel prices triggering widespread protests which left at least 17 people dead and scores injured when soldiers opened fire on the crowds.
Mnangagwa, who critics accuse of lacking commitment to political reforms and using his predecessor’s heavy-handed tactics to stifle dissent, has pleaded for time and patience to bring the economy back from the “dead.”
The country’s economy has declined even further, with goods prices skyrocketing and annual inflation peaking at 176 percent in June, before the government stopped publishing inflation statistics. International Monetary Fund said Zimbabwe’s August inflation rate accelerated to 300 percent and some economists estimate that the real rate may be double that figure.
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