Johannesburg - Zimbabwe’s economic crisis has reached catastrophic proportions. With the government raising the cost of fuel from R19 to R41 a litre, fuel has become more expensive in Zimbabwe than anywhere else in the world.
The economic meltdown of our northern neighbour poses a serious threat to our national interest. If Zimbabweans are unable to survive, it is to South Africa they will turn, and how will we absorb thousands of new economic migrants with our current levels of unemployment and overstretched social services?
It is right that we do not turn away Zimbabweans from our hospitals, but our system is unlikely to cope with a new influx of Zimbabwean refugees. Assisting Zimbabwe to right its economic ship and resolve its political challenges is arguably our most important foreign policy priority now.
On Boxing Day, our director- general of the Treasury and Reserve Bank governor met with their Zimbabwean counterparts and agreed to work together to assist the Zimbabwean economy. Finance Minister Tito Mboweni has come out saying Zimbabwe needs a new currency, and he would like to see an end to economic sanctions on Zimbabwe.
There is no question that our policymakers are concerned. The currency is a major issue that needs to be attended to. A week ago, Zimbabwe’s finance minister announced that Zimbabwe intends introducing a new currency in the next year; it may be that the time frame needs to be brought forward.
The Zimbabwean government had abandoned the Zim dollar in 2009 after inflation reached 500 billion percent the year before. Rands and dollars were then supplied, but by 2016 the government had started issuing bond notes that were pegged at three bond notes to US $1. The system of the government borrowing via treasury bills was always problematic, as a government should never create money without the backing of gold or currency reserves.
The government’s latest panacea to its economic woes was to implement a 150% fuel hike, but for Zimbabweans struggling under poverty and rampant unemployment, that was medicine too bitter to swallow, and for many the final straw. As is the case with many grassroots uprisings, price hikes that are outrageously unaffordable to the masses is the catalyst which brings people out on to the streets in revolt.
What is even more concerning is the reaction of Zimbabwe’s security forces to the civilian protests this week, very reminiscent of the scenes across Sudan of the security forces beating up young people and throwing them in detention cells. Last week I reported that over 1000 protesters had been detained in Sudan in the space of three weeks.
Just this week, Zimbabwe’s security forces detained over 200 civilians, mostly youths, in the most draconian crackdown since independence in 1980. Even the popular Zimbabwean Pastor Evan Mawarire is being detained in a dirty, leaking underground cell at Harare’s central police station.
Human rights organisations have condemned gross illegal human rights abuses in Zimbabwe this week, which have included the police and army conducting brutal door-to-door operations. The recorded scenes were so shocking that even the EFF condemned the use of the Zimbabwean military against protesters.
While the chaos in Zimbabwe continues, President Emmerson Mnangagwa has been in Russia trying to court investment and loans. He also intends to participate in the World Economic Forum in Davos on the same mission of drumming up investor confidence.
But this will be a tall order, given the violent reality on the ground.
* Shannon Ebrahim is the Group Foreign Editor.