IMF payment fuelled hyperinflation



ng=EN-GB> – We have seen some really serious breeches of common sense by the government of Zimbabwe recently.

It paid off its outstanding arrears to the IMF – spending US$209 million, enough money to pay for our essential food imports for nine months, or our fuel imports for 10 months and our electricity imports for two years or our requirements for all essential drugs for four years.

What did we get for this effort? Absolutely nothing! The IMF issued a statement last week saying that while the payments meant that we were no longer a candidate for expulsion we still owed the fund many millions of dollars against other obligations and would still be suspended in terms of our voting and access rights at the IMF. They would not even re-open their office in Harare.

As a direct consequence of this act by the Zimbabwe regime, we have had virtually no maize meal in our shops for over a month. The World Food Programme is feeding about five million people every day now, but this still leaves six million people without their basic staple food.

We also now have to sit in the dark for several hours every second day or so as we suffer “load shedding”. Fuel now costs nearly Z$200 000 a litre and is in short supply everywhere. As for essential drugs – just try and find these in our pharmacies and hospitals.

We owe external creditors US$5 000 million. Paying US$209 million to the IMF is 0,04 percent of our liabilities. By paying the IMF we avoided expulsion – but so what? It changes nothing on the ground and just exacerbates our humanitarian and economic crisis.

If we were expelled we would have been only the second country in the history of the IMF to be so, but if we then put our house in order and brought back the policies we need to implement to get back on our feet, they would have come back in within months and our membership would have been restored – together with all our rights as a member. 

Then we found out that to make the last payment to the Fund the Reserve Bank simply printed local currency and bought hard currency on the street and from exporters. In doing so they pushed the parallel market up to $220 000 to one US dollar at one stage last week with it falling back to 200 000 to 1 now.

Bread today is selling at Z$60 000 to Z$70 000 a loaf, flour allocations to bakeries have been reduced to 30 per cent of normal and prices again increased by 25 per cent this week. Eggs are now approaching Z$250 000 a dozen, beef is Z$400 000 a kilo and when I went to the dentist week for a tooth to be pulled I came away Z$13 million poorer!

We gave a lift to Harare last week to a railway pensioner who gets Z$38 000 a month to live on.  Looking at the parallel market prices for hard currencies it is now quite clear that for the first time we are really into hyperinflation.

Parliament has opened and closed until March – with nothing either achieved or done about the national economic and political crisis we are in at present. In fact the President said in the long rambling interview on Sunday night that there “is no crisis in Zimbabwe that warrants intervention.” Behind the high security walls of his home that may be true – it’s certainly not true for the rest of us.

Tony Blair was in the region recently. He flew from a summit of G8 leaders in Moscow to Pretoria where he spent the whole weekend with the President of South Africa and others in a luxury lodge just outside the City. On Sunday night he was interviewed on South African television – an exclusive. He and a very glamorous TV presenter talked for 40 minutes – about everything except the tragedy 500 kilometers to the north of where they were sitting. 

Not one word, not a single question – it must have been by prior agreement.  That means either they did something about the Zimbabwe crisis that weekend or they did nothing and like the United Nations, the African Union and the SADC, they chose to simply ignore the problem. I rather think they did talk about us and did discuss what to do next and agreed not to talk about it in public. But I have yet to see or hear of any new initiative.

Post published in: Economy

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