ZIMBABWE A Broken Country: Analysts

ZIMBABWE A Broken Country: Analysts
Published: 2016 May 20 20:32:05 (1435 Views)
...Mangundya says corruption has killed the economy

IS the country, once a breadbasket in southern African, broke or broken?

Economists and analysts are divided, but many agree the situation is cause for grave concern.

While others agree that Zimbabwe is now broke, Reserve Bank of Zimbabwe (RBZ) governor, John Mangudya, insists it is not broke, but has been damaged by errant entrepreneurs and rogue dealers.

Industrialist, Busisa Moyo said: "Zimbabwe is a broken economy that requires mending, healing and a new soul," said Moyo, the Confederation of Zimbabwe Industries (CZI) president.

Economist, Godfrey Kanyenze, said it was difficult to categorise the country as broke.

"(But) it is in paralysis, in stasis, logjam as a result of a predatory state," he said.

"The presidential system where power is centralised in the Presidency promotes clientelism, cronyism and creates a dependency syndrome, and hence the dominant culture of consumption," said Kanyenze.

John Robertson, an economic consultant, disagreed, saying Zimbabwe was "certainly broke".

"The economy is certainly battered and bent, but all the damage can be fixed. Unfortunately, the nature of the damage can be largely described as the result of government interference," said Robertson.

 "This has turned the country into a hostile environment for new businesses and a very discouraging place that has stopped most existing businesses from growing," he added.

But Reserve Bank of Zimbabwe governor John Mangudya differs.

He said charlatans who are mercilessly milking the economy had ruined Zimbabwe.

"What I believe is that Zimbabwe is not broke but damaged by people who abuse (its) resources," Mangudya was quoted as saying by a local weekly business publication.

"People are taking the money out of the country. It's leaking outside the country. The money is going out either through wire transfer or cash. I am concerned with the misuse of foreign exchange. We need to promote the use of plastic money," he argued.

Zimbabwe is currently grappling with a liquidity crisis caused by largely inadequate supply of foreign currency in the economy. This has seen the RBZ announcing that it will print bond notes in a few months to come as a stop gate measure to ease cash crunch in local banks. The plans have caused uproar with citizens rejecting the plans.

- Financial Gazette
Tags: Economy, ZRP,
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