Zim likely to fall into serious politically driven economic crisis

Economic commentator Gift Mugano has warned that Zimbabwe faces a high risk of falling into a serious economic crisis if political violence that characterised the recent by-elections is allowed to take place.

Members of the opposition Citizens Coalition for Chance (CCC) party who were campaigning in Matobo ward 2 and Insiza ward 4 in Matabeleland South were allegedly assaulted by Zanu-PF youths last month in the run-up to the October 22 by-lections.

Several CCC members were injured including Jasmine Toffa, a proportional representation member of Parliament for Bulawayo who sustained fractures on both wrists.

Mugano who was speaking at a recent Insurance Institute of Zimbabwe (IIZ) 2022 annual conference in Victoria Falls said Zimbabwe is facing serious risks chief among them political risk.

The current government led by Mnangagwa came into office in 2018 following a contested presidential election which was decided by the courts.

This followed the 2017 coup which overthrew long-time leader Robert Mugabe.

Mugano said a government that comes into power through violence is an economic risk.

He said inflation, lack of competitiveness and the United States dollar economy are some of the major risks in Zimbabwe.

“Inflation is a real risk as it reduces capital. Competitiveness is also a risk and if I was to be a Minister of Finance I would push for the Zimbabwean dollar currency because the United States dollar is a real risk.

“Political environment is another risk. People want a leader who comes to serve them so let’s have a peaceful run-up to elections, it’s good for business,” said Mugano.

He said any political violence will affect the economy.

“If the current government comes back through violence they will not be able to rule for five years. Whoever wins in a free and fair election is not going to be a risk,” Mugano added.

He said the country’s capacity utilization is expected to go down according to the Confederation of Zimbabwe industries.

Borrowing has also gone down because of the 200 percent policy on loan interests.

Mugano said Zimbabwe’s economy is very complicated as 7.9 million are in extreme poverty which stands at 49 percent.

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