The Zimbabwean government has appealed to the International Finance Institutions (IFIs) for a bailout package, concerned that it was close to collapse without an urgent stimulus rescue package.
This was revealed in the April 30 edition of the “Africa Confidential”. The publication said Finance Minister Mthuli Ncube wrote to the International Monetary Institution, World Bank and African Development Bank highlighting the country’s precarious financial position and pleading for cash. Part of the report read:
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In an extended ‘mea culpa’ on behalf of President Emmerson Mnangagwa’s government, Finance Minister Mthuli Ncube has written to the international financial institutions (IFIS) in Washington saying it takes ‘responsibility for the recent policy missteps during late 2019′ which have led to inflation currently running at an annual rate of over 500% year.
… In the letter [dated 2 April], a copy of which has been seen by Africa Confidential, the usually upbeat Ncube paints a relentlessly grim picture. “Zimbabwe’s economy could contract by 15-20% during 2020 – with very serious social consequences. Already 8.5 million Zimbabweans (half the population) are food insecure, he writes.
So bad is the situation, says Ncube, that it could cause an implosion of the state and threaten security in neighbouring states.
The global pandemic will take a heavy toll on the health sector, with many lives being lost and raise poverty to levels not seen in recent times, including worsening food security.
A domestic collapse also would have potentially adverse regional effects, where spillovers are significant.’
Zimbabwe has been in crisis after crisis since the turn of the Millenium after it defaulted on its debts repayments to the Bretton Woods institutions resulting in the suspension of financial support from the multilateral bodies.
The country’s inconsistent policies and rampant, endemic corruption by the political elite have exacerbated the economic implosion.