A source at the IMF said in order to get funding Zimbabwe will need to overhaul its public sector, including a crackdown on rampant corruption and mass layoffs, which has led to demonstrations in the past.
A deal to compensate white farmers who were evicted from their land also needs to be reached, the IMF source said.
If the ruling ZANU-PF wins the election, Mnangagwa has said he will strike a deal with the IMF and introduce a new Zimbabwean currency within 3-5 years.
But the leader known as “The Crocodile” hasn’t shown any signs of prudence yet, handing civil servants a 17.5 percent pay rise in May and passing a 2018 budget with a bigger deficit.
Even before the IMF will engage in talks, it will want to see a free and fair election. The opposition protested this week, saying the electoral process was being rigged, with ballot papers being printed without their participation.
Mnangagwa is slightly ahead in opinion polls, which are unreliable, but his challenger, Nelson Chamisa, 40, is gathering momentum and the vote may provide no clear winner, meaning a messy coalition may have to be formed.
Even if Mnangagwa wins, he does not have a firm grip on ZANU-PF, with his powerful deputy Chiwenga intent on imposing his authority after taking a massive risk in leading the coup to oust Mugabe, political and diplomatic sources say.
Middlemen from both camps want to be the gateway for investment and are obstructing deals that don’t pass through their offices, making it difficult for businesses to know who they should work with, several investors said.
A party divided with the military on one side and Mnangagwa on the other is not a conducive environment for investment.
“Everyone wants a slice of the pie,” said the owner of an energy firm who has a deal in limbo due to a dispute between factions aligned to Mnangagwa and Chiwenga.
“They must be careful. The experience ‘small boys’ like me are having sets the tone for how ‘big boys’ view the risks.”
Mnangagwa and Chiwenga did not respond to requests for comment.
Whoever wins the election won’t have long to take the difficult decisions needed to get Zimbabwe’s economy back on track before the public optimism built on the back of Mugabe’s removal disappears.
“Do you think this is what I want to do with my life?” said black market currency trader Charity Kambarami, waving a wad of bond notes in the air.
“I would also love to go to work and get paid at the end of the month but there are no jobs. The politicians have promised a lot. We have suffered enough.” – The Source/Reuters
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