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Economists: Zimbabwe At Risk of Becoming Failed State

FILE: Zimbabwean central bank governor John Mangudya delivers his 2016 Monetary Policy statement in Harare, Feb. 4, 2016.
FILE: Zimbabwean central bank governor John Mangudya delivers his 2016 Monetary Policy statement in Harare, Feb. 4, 2016.

Political analysts and economists are warning that Zimbabwe risks becoming a failed state as the country faces multiple social and economic problems, spawned by endemic governance failures and compounded by a debilitating ruling party succession crisis.

Harare has been lurching from one crisis to the next. The latest is the divisive debate on whether Harare must pay its arrears to the international community or pay its restive civil servants.

Central bank chief John Mangudya says Harare has secured a loan from the Africa Export and Import Bank or Afriexim bank to repay arrears totaling about 1, 8 billion dollars. This Mangudya says will help Harare to access fresh funding and revive the ailing economy.

But from remarks by the International Monetary Fund and the United States of America, which has veto power at the IMF board, it’s not clear that Harare will automatically get fresh funds after settling its arrears.

At a press briefing last week, IMF Communications department director, Gerry Rice, said Zimbabwe was working on a plan to clear its arrears with the fund and other international institutions, adding there was no financing program under discussion.

Rice said irrespective of the calendar for arrears clearance, the Zimbabwean economy needed immediate reforms to address the vulnerabilities that have come to the fore.


In an exclusive interview with Studio 7, United States Ambassador to Zimbabwe Harry Thomas Junior said it is premature to talk about the U.S response now as Zimbabwe has to settle its debt first.

This, according to former finance minister Tendai Biti also leader of the opposition People’s Democratic party, points to demands by the IMF for Harare to reform.

Economist, Professor Tony Hawkins concurs with Biti but adds that with an election looming Harare will not institute reforms.

But the question is whether Harare must prioritize clearing its arrears or pay its workers.

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Economist Prosper Chitambara of the Labor and Economic Development Research Institute of Zimbabwe says workers must come first.

But Hawkins says its comparing apples and oranges.

What then is the way forward? Biti says Harare must look inwards and also admit that it has failed.

President Robert Mugabe though has blamed sanctions imposed by Western countries for the government’s failure to pay its workers on time. According to latest statistics from the Zimbabwe Revenue Authority, collections in the second quarter of this year were 861 million dollars against a target of 892 million dollars.


But what is the end game? The International Crisis Group or ICG has warned that mounting tensions in Zanu PF over President Robert Mugabe’s succession, the dire economic crisis and related issues could see Zimbabwe sliding into a failed state.

The think tank also noted that neither the government nor the opposition has a plan the country is willing to rally behind. Former U.S. Ambassador to Zimbabwe James McGee also warned at one time that Zimbabwe was rapidly deteriorating into failed-state status.

The ICG says for Harare to avoid the prolonged uncertainty it must address Mr. Mugabe’s succession, seek to rebuild trust and collaboration with domestic and international constituencies by holding an inclusive dialogue with the opposition and civil society on political and economic reforms.

What happens if reforms fail? Author Robert I. Rotberg in a book titled Failed States, Collapsed States, Weak States: Causes and Indicators says Harare becomes a failed state.

"In most failed states, regimes prey on their own constituents. Driven by ethnic or other intercommunal hostility, or by the governing elite’s insecurities, they victimize their own citizens or some subset of the whole that is regarded as hostile. As in Mobutu Sese Seko’s Zaire or the Taliban’s Afghanistan, ruling cadres increasingly oppress, extort, and harass the majority of their own compatriots while privileging a more narrowly-based party, clan, or sect."

Economists warn that Harare must institute stringent economic reforms as all economic indicators are headed south.