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Tsvangirai: Politics to End Zimbabwe Social, Economic Crisis

  • Blessing  Zulu

Former Prime Minister and MDC-T leader Morgan Tsvangirai says Zimbabwe’s economic meltdown is caused by an unresolved political crisis.

Mr. Tsvangirai reiterates the need for national dialogue to rescue the country’s economy from total collapse.

President Robert Mugabe's Zanu PF party won the 2013 general election but has been struggling to revive the economy battered by years of stagnation, especially before the formation of a unity government in 2009.

President Mugabe has blamed targeted sanctions imposed by the West for the country's economic problems.

Central bank governor John Mangudya said recently the Reserve Bank of Zimbabwe will strive to tackle serious challenges facing the Zimbabwe economy including low aggregate domestic demand, deterioration of the balance of payments, banking sector vulnerabilities and depressed industry capacity utilization.

According to the new governor of the Reserve Bank of Zimbabwe, the lack of liquidity and its limited circulation within the economy remains the biggest immediate challenge that the Zimbabwe economy is facing.

He said at the epicenter of the liquidity crunch is the country’s banking sector, which has been operating without a formal interbank market and a lender of last resort since the introduction of the multiple currency system in 2009.

The government has projected that the Zimbabwe economy will grow by about 6 percent but independent economists say it is set to grow by at least 3 percent this year.

The country has been hit by deflation exacerbated by lack of foreign direct investment resulting in depressed revenues for state coffers. Most foreign investors say they risk losing their businesses in Zimbabwe due to the black economic empowerment programme, compelling them to transfer majority shares to indigenous people.

Studio 7’s Blessing Zulu spoke with Mr. Tsvangirai about the country's socio-economic problems in this exclusive interview.