ZIMBABWE

Zimbabwe is yet spiralling further into economic crisis with the threat of hyperinflation, collapsing power supply, and cash shortages. Regional coronavirus restrictive measure will cut remittances and mining revenues, further aggravating Zimbabwe’s economic outlook, while import halts will exacerbate shortages of food and drugs. The mismanagement of the coronavirus outbreak, amidst allegations of misinformation and corruption, will be used by rival political factions to force the ouster of the president unless he can forge a new alliance. Beyond the fall in remittances and mining revenues, the regional lockdowns and spread of the coronavirus are likely to have a serious impact on Zimbabwe’s already weak economy. Economic output economy is expected to have contracted by 7.5 percent in 2019, according to the World Bank, with extreme poverty rising to 34 percent, or 5.7 million people. Zimbabwe is now one of the four most food insecure states of the world. Moreover, Zimbabwe’s failing economy and mismanaged coronavirus crisis, as well as the government’s inability to secure a debt relief and financing deal, will seriously undermine political stability and security in 2020.

• Zimbabwe’s political climate is fast deteriorating and the economy faces collapse. President Mnangagwa will seek new allies to entrench his authority in the face of an emerging challenge from within his own party. In anticipation of attempts to force his ouster, Mnangagwa is seeking a political alliance with Nelson Chamisa’s Movement for Democratic Change (MDC). The MDC has refused to recognise Mnangagwa’s victory in the 2018 presidential vote. However, the president’s allies are increasingly considering such a political deal as a last resort to attract new and avoid further economic collapse, thereby staving off a challenge from within the ruling party.
• Another military intervention will remain a likely scenario well into 2020. In preparation for an eventual power dispute, ZANU-PF leaders are arming militias in the countryside. The president now faces a similar challenge from armed militias running rampant in the ruling party’s heartlands, while his business allies are being undermined. As long as the treasury can pay military salaries, Mnangagwa is likely to remain safe from any unconstitutional intervention. However, such a prospect seems increasingly unlikely given the fast deterioration of the economy and the onset of a public health calamity. In response, the military and other security forces will be increasingly likely to seek a change at the helm of the distressed country.
• International funding is becoming increasingly urgent. Zimbabwe’s outstanding foreign debts of USD 8 billion have isolated the country from additional loans from the International Monetary Fund (IMF), World Bank, African Development Bank, and the Paris Club. The government claims it has improved fiscal consolidation aimed at reducing monetary financing of the deficit, the reintroduction of the domestic currency in February 2019, and the restructuring of the command agriculture financing model to a public-private partnership with commercial banks. However, the IMF says the reforms are off-track due to inconsistent policy implementation, notably delays and missteps in foreign exchange and monetary reforms.