Zimbabwe faces its worst economic crisis in a decade


HARARE, Zimbabwe — 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.

Instead, it appears to be imploding in the days since the new finance minister announced a “stabilization program.” Over the weekend long lines for fuel reappeared, sometimes stretching for several kilometres.

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.

“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.”

The country’s Retail Pharmacists Association describes the shortages of medicines as “severe.”

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 per cent, 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 U.S. 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 U.S. dollar on the black market.

Retailers said the soaring rates for U.S. 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, told the AP.

In the days leading to the implosion, new Finance Minister Mthuli Ncube, a former lecturer …read more

Source:: Nationalpost – News

      

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