World Economy

Zimbabwe Economy a Ticking Time Bomb

Zimbabwe Economy a Ticking Time BombZimbabwe Economy a Ticking Time Bomb

Zimbabwe’s deteriorating economy is a ticking time bomb which could trigger social unrest, analysts have warned.

The economy is groaning six years after the introduction of a multicurrency regime. The prevailing cash shortages have exposed government’s shortcomings after plans to introduce the bond notes were brought down by banks, industry and citizens, AllAfrica reported.

This comes as companies continue to struggle while senior government officials are implicated in corrupt activities involving many millions of dollars exposed in the media and confirmed by the auditor-general’s reports.

Evidence of the economic crisis is failure by the Zimbabwe Revenue Authority to meet its revenue collection targets. Earnings for the first quarter of 2016 were at $724.9 million against a target of $861.8 million.

Recently, pockets of resistance have been witnessed across the country as individuals and civic groups have taken it upon themselves to confront President Robert Mugabe and his government, demanding they step down.

A recent ban on imports sparked riots at the Beitbridge Border Post as cross-border traders fight for their turf—their last hope as the economy has failed to create new jobs.

“At the rate at which the economy is going down right now, we will be suffering severe shortages of most important goods, including food, long before the end of the year,” said economic analyst John Robertson.

He said the worst affected companies would be those that would not be able to obtain fuel or would suffer power cuts because production would stop. Next in line, he said, would be the companies that produced valuable goods or services, but failed to sell them because people would have no money.

“Lower wages or late wage payments will reduce demand from the shops, so these shops will also pay less tax. Government will then buy less from all suppliers and this will force down the delivery and quality of government services.”