Zimbabwe is struggling to prop up its economy, weighed down by years of decline blamed on poor economic policies and political instability. Inflation has ratcheted up to more than 50 percent and foreign currency shortages are resulting in shortages of key commodities such as fuel and imported raw materials for productive sectors.
To offset the economic meltdown, the government of President Emmerson Mnangagwa has introduced new currency deregulation reforms in addition to austerity measures such as dropping some subsidies aimed at cutting expenditure and at curbing pricing distortions.
“Its success, of course, the currency reforms’ success, will depend on the implementation of an effective overall monetary policy framework supported by market-determined interest and exchange rates, together with prudent fiscal policies. So it’s the major set of challenges facing Zimbabwe,” Gary Rice, a spokesperson for the IMF said on Friday.
The economic challenges that Zimbabwe is facing have frustrated investors, with funders pulling out. Zimbabwean companies such as Simbisa Brands have stayed plans to list in London until certainty is restored to the economy.