Can the IMF really drag Zimbabwe out of its crisis?

The Zimbabwean government’s plan includes cutting the public sector payroll, privatising state-owned enterprises and agreeing to compensate white farmers who were chased off their land. These are the kinds of reforms that Biti doesn’t think the government is serious about. He says a ‘gullible international community’ has been hoodwinked by the government.

South African business consultant Duncan Bonnet told ISS Today that foreign investors remain sceptical about these optimistic promises of a new engagement with international financial institutions. ‘Zimbabwe has made overtures to the IMF in the past, but even if they get a loan, there will still be a huge number of hoops to jump through to adhere to the IMF’s criteria. You need policy certainty; and that isn’t the case at the moment.’

Bonnet, a director at Africa House consultancy, says a lack of transparency about the country’s finances makes it very difficult to judge whether there is a real possibility to turn things around. Investors have been waiting for ‘the green light to go on’ – the end of the political crisis in Zimbabwe. ‘We’ve been saying the same thing for 10 to 15 years, but the situation is very fluid.’

Zimbabwe expert Piers Pigou agrees that making the changes required by the IMF in a volatile and dangerous political situation, where ‘the centre is barely holding’, seems unlikely. Despite the ‘debilitating atmosphere’, embedded corruption and a complete lack of confidence in the economy, sections of the international community are desperate to get Zimbabwe back on track. ‘The question is; can Mugabe deliver?’ asks Pigou.

For example, the civil service was almost doubled after the 2013 elections, endorsed by international observers. This was to repay supporters of ZANU-PF. Radical cuts in the public service, as requested by the IMF, would be political suicide.

And even if loans would be forthcoming, the economic crisis is so deep that ‘it would be just kicking the ball further down the road,’ Pigou said. ‘ZANU-PF is trying to buy time, but [its reprieve] is getting shorter and shorter.’ He adds that the next few weeks will be crucial in showing whether the country could prevent a further decline into the realms of a de facto failed state.

Two factions within the ruling party have been facing off in a bruising political battle in the last several months. The one group can be dubbed the ‘reformists’. Led by Zimbabwean Vice-President Emmerson Mnangagwa and supported by the governor of the reserve bank, John Mangudya, they are in favour of engaging with the international community, says Pigou.

On the other hand, Mugabe, his wife Grace and a group of supporters called Generation 40 have been campaigning against Mnangagwa to succeed Mugabe. The succession battle has become increasingly hostile, with Mugabe lashing out on several occasions against war veterans – previously his strongest supporters.

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