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Starving
the nation
Crisis
in Zimbabwe Coalition
March 08, 2007
On 3 March 2007, the Consumer
Council of Zimbabwe (CCZ) issued a statement stating that a
family basket of five people had risen to Z$686 000 from Z$462 000
in the month of February 2007, a 67.35% margin increase in the cost
of goods for consumers. The CCZ also noted a sharp increase in United
States dollar terms, the family basket had shifted from US$1 835.95
in January 2007 to US$2 744.46 last month (using the official rate
of US$250).
The
figures are a depiction of the deep-seated nature of the Zimbabwean
crisis which is intrinsically intertwined in the governance crisis
and the illegitimacy of the incumbent government. Zimbabwe has a
strained supply being outstripped by a huge demand base. This is
noted by the failure of the state to manufacture proportionate goods
to meet the demand of basic commodities such as bread, seed, sanitary
ware among other requirements. To close the blurring gap of supply
and demand, the black market is thriving as it supplies goods at
higher prices, in the process fueling the inflation rate.
Since 2000,
Zimbabwe's Gross Domestic Product (GDP) has been recording
a red margin. In the year 2000 it was pegged at -7.8%; in 2001 it
drastically gained to -3.2%; it further deteriorated to -4.2% in
2002; the GDP plunged to an all time low record of -10.2% in 2003.In
2004, it was fixed at -4%, before shooting to -6.5% in 2005. The
negative margin leapt in 2006 to -5%. For the year 2007, the International
Monetary Fund (IMF) projects the GDP to set at -4.8%. Hence in this
period under review, the economy has been in recession, being sustained
by inconsistent and militant policies from both the Reserve Bank
of Zimbabwe and the Ministry of Finance.[1]
Irrespective
of taking into cognisance of its supply deficit and the noted failure
to manufacture goods, the Zimbabwean government, through the Central
Bank continue to print unbudgeted money. The result is high money
supply (M3) in the economy chasing few goods, which become fertile
soils for ballooning inflation. This scenario is not likely to stop
soon, the Coalition predicts that the family basket will continue
to increase on a monthly basis, till the year end, unless something
dramatic happens.
Other competing
factors in stimulating the monthly increase of the family basket
on monthly basis include the burden brought to the national fiscus
by the 85% unemployment rate being sustained by less than 1.9 million
employed people of the 13 million national population.
Inflation is
currently at an all time high rate of 1600%, the highest in the
region, the IMF predicts the rate to be at 4000% by year end. There
seem to be no visible mechanisms and policies to avert the cancerous
deterioration of the economy in a place which was once esteemed
as the jewel of Africa. A food and security vanguard for the region,
has crumbled to a basket case of the region.
The country
remains a problem child in balancing off its debts with trading
partners due to the critical shortage of foreign currency. As of
2006, the country had a huge debt margin of US$3.9 billion with
internal debt of US$208 million.
It is prudent
for the government to start propounding policies that are in line
with principles of non-corruption, transparency and accountability
in order to save the nation from the jaws of economic collapse.
Zimbabweans have the right to a thriving economic environment that
rewards workers, civil servants, enables students to go to school
and overly cherishes the idles of human rights and the rule of law.
Visit the Crisis
in Zimbabwe fact
sheet
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