Daily Management Review

IMF Warns That Big Economic Reforms Are Needed Right Away For Zimbabwe Economy


11/24/2017




IMF Warns That Big Economic Reforms Are Needed Right Away For Zimbabwe Economy
The International Monetary Fund is of the view that if the Zimbabwe economy wants to obtain international aid and get out of the bad situation, it needs to do something quickly.
 
Zimbabwe mission chief of IMF, Gene Leon, said that structural reform is needed in Zimbabwe because the country’s foreign and government spending are too high.
 
Growing the economy and providing "jobs, jobs, jobs" is what has been promised by the country's incoming leader Emmerson Mnangagwa.
 
It is now regarded as a regional basket case even though it was once a thriving economy.
 
"The economic situation in Zimbabwe remains very difficult," Mr Leon said.
 
Zimbabwe has already defaulted on alarge international debt and the country needs to address that issue as well as there should be a plugging on high government spending, he said.
 
"Immediate action is critical to reduce the deficit to a sustainable level, accelerate structural reforms, and re-engage with the international community to access much needed financial support," Mr Leon said.
 
Pressurized by his own Zanu-PF party and the military, earlier this week, Robert Mugabe, who led Zimbabwe for 37 years, had stepped down.
 
The disastrous condition of Zimbabwe's economy is a result of printing too much money by Mugabe and because of his disastrous land reforms, among others.
 
Mr Mugabe's regime had been supported by the repressive apparatus and a call for dismantling it through deep-rooted political reform, has been given by Zimbabwe's main opposition.
 
The AFP news agency reported that cautious optimism that the Mnangagwa presidency would not "mimic and replicate the evil, corrupt, decadent and incompetent Mugabe regime", has been expressed by the Movement for Democratic Change (MDC).
 
It is unclear if a coalition government comprising of national unity including opposition groups will be created or whether Zanu-PF will run the government along till the scheduled elections next year.
 
Zimbabwe's economy has become half of what it was at the turn of the millennium.
 
Inflation in the country had reached an astounding 231 million per cent in 2009 - which was shoddier compared to the inflation in Germany after World War one and its was at this time that the old Zimbabwean dollar had to be withdrawn due to such hyperinflation and at present, there is no currency of its own for Zimbabwe.
 
Seeking loans and debts often form banks has become the norm for Zimbabwe because of cash shortages. Ever since the country had begun defaulting on its debt in 1999, Zimbabwe had been barred from making any international borrowing even though cash injection is what the country’s economy now requires, say economists.
 
Since the time that the army has taken over the government in the country, some form of improvement in their lives have already been reported by some residents of the country's capital, Harare.
 
It had been a common practice by policemen, posted at police road blocks on the streets, to demand bribes from people for travelling around and with the advent of the army, this practice has bene stopped which is one of the benefits to the common people.  
 
"There used to be so many police roadblocks, with the driver having to pay $1 or $2 (75p-£1.50)" Spiwe Azvigumi, 31, an unemployed mother of three, told AFP.
 
"With the police off the roads, crime is actually down - they were so corrupt and now we are living free."
 
(Source:www.bbc.com)






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