The International Monetary Fund warned on Tuesday that Zimbabwe’s economy is in a state of virtual collapse with growth contracting, inflation rampant and poverty soaring.
In an annual report issued after Zimbabwe won a six-month reprieve from the threat of expulsion from the IMF, directors expressed ”deep concern” at the economic situation under President Robert Mugabe.
”Directors observed that without a bold change in policy direction, the economic outlook will remain bleak, with particularly detrimental effects on the poorest segments of the population,” the report said.
IMF forecasts laid bare the economic crisis gripping a country once known as the breadbasket of southern Africa.
Zimbabwe’s gross domestic product is expected to contract by about seven percent this year owing to ”difficulties in agriculture, rising inflation, and foreign exchange shortages, particularly for fuel imports”.
The country’s GDP already shrank by about four percent last year and 10,5% in 2003, the IMF said.
Inflation hit a peak of 623% in January 2004 before ”stabilising” around 130% in early 2005 and then surging again to 254% in July, it said.
”The widening fiscal deficit and quasi-fiscal activities would contribute to money growth, pushing inflation to over 400% by end-2005,” the IMF said.
It said the Mugabe government’s ”Operation Restore Order”, a programme of slum clearances which the opposition says was a political ploy to drive away its supporters, has left at least 700 000 people homeless or destitute.
”Food security is an urgent issue, given the sharp fall in agricultural production,” the IMF also said.
Since 2000, Zimbabwe has seized about 4 000 white-owned farms and redistributed them to landless blacks under a land reform programme which it says is aimed at redressing colonial injustices.
The IMF and international critics led by the European Union and the United States say the land reforms have served only to leave Zimbabwe’s poor menaced by famine when once the country was a grain exporter.
Zimbabwe has at least found favour with the IMF by making a surprise payment of $120-million on August 29 as a first installment towards clearing its debts owed to the Washington-based lender.
Without the payment, Zimbabwe was at risk of becoming only the second country to be kicked out of the IMF since the former Czechoslovakia in 1954.
In the event, the IMF gave Mugabe’s government another six months to settle the $175-million it still owed the fund before reviewing the matter again.
State-run newspaper The Herald said on Tuesday that Zimbabwe had made a new payment to the IMF of $15-million and plans to clear the remaining $160-million by February.
While welcoming the August transfer, the IMF report noted that several board directors wanted ”clarification regarding the source of the funds for this payment”.
Given the country’s dire economic straits, the August payment prompted suspicion about its provenance.
Economists say the country’s central bank has failed to clear up the mystery despite official claims that the money came from overseas accounts and proceeds from sales of gold, tobacco and cotton exports.
The IMF is keen to verify the source of the funds to comply with its strict rules on transparency.
The report, noting the new six-month deadline, said the board ”urged the authorities to resolve Zimbabwe’s outstanding overdue financial obligations to the fund, and decided to give Zimbabwe more time to demonstrate its commitment to improving cooperation with the fund”.
Refugee services ‘swamped’
Meanwhile, the South African Council of Churches (SACC) said the way in which Zimbabwean refugees were being treated was unjust, and said it was up to the government to do something about it.
SACC coordinator of the Zimbabwe Action Campaign, Eleanor Sisulu, said there were not enough centres for asylum seekers in South Africa.
”The refugee services in South Africa are being swamped. The magnitude of the problem is just too huge,” she said in Johannesburg on Tuesday.
She said granting refugee status to Zimbabweans was a slow process and corruption within the police needed to be stopped.
A group of Zimbabwean non-governmental organisations, which met with the SACC on Tuesday, asked the council to increase its advocacy initiative on Zimbabwe with the South African government.
”The SACC does have a special role to play in this regard. There are various groups engaging various arms of the South African government,” Sisulu said.
”There are three million refugees in South Africa, and it is incumbent on the SA government to do something about it,” said Eddie Makue, SACC deputy general secretary.
Sisulu said the Zimbabwean government’s campaign to delegitimise churches as ”imperialist puppets” had been very successful and had to be constantly countered.
Joyce Dube, a rights NGO representative, said she was aware of 10 refugees arriving from Zimbabwe daily.
”Most of them are running away to save their lives. Last month there were 480 new arrivals. From Musina to Cape Town, in every town you find a Zimbabwean,” said the director of the Southern African Women’s Institute for Migration Affairs.
”I ask the South African community to accept refugees. The police are promoting xenophobia,” she said.
Makue said the recent lack of rain did not bode well for Zimbabwe’s current sowing season, and that food insecurity in the country would continue to grow.
He said it was imperative Zimbabweans found a solution to their problems, but added that the African Union member states had a responsibility as well.
Dialogue between Mugabe’s ruling Zanu-PF party and the opposition Movement for Democratic Change was not enough.
”We must look at a national dialogue happening in Zimbabwe.”
Sisulu said there were ”a lot of skills” within the refugee community which they could use to address their problems.
On her recent visit to Zimbabwe she had seen that the government’s clean-up campaign was continuing.
”Thugs are harassing vendors in the streets. There were reports of police cadets raiding vendors.”
Women, who made up the bulk of cross-border traders between South Africa and Zimbabwe, had also had their goods confiscated.
She said Bulawayo had gone for the past five weeks without municipal services, due to the fuel shortage, and added that health services in the country were in a ”dire situation”. – Sapa-AFP