“2023 Will Be Dire for Zim” Economists Skeptical
Economists are pessimistic about 2023 saying the situation will be “dire” in Zimbabwe due to several factors including harmonized elections and spill-over effects of difficulties encountered during 2022.
During a visit to the southern African country in December, the International Monetary Fund (IMF) predicted a further fall in the gross domestic product (GDP) by 3.5 percent in 2023.
Analysts say years of economic malpractice under Zimbabwe’s first leader, Robert Mugabe and later under his predecessor Emmerson Mnangagwa, have stymied the economy, further worsened by hyperinflation and the currency devaluating promptly.
A visiting professor of economics at the University of Zimbabwe Business School, Gift Mugano, told Al Jazeera that the country’s 2023 economic outlook is gloomy.
Due to increased government spending as the central bank prints more money for contractual obligations to government suppliers and to finance agriculture, the local currency is expected to continuously weaken against leading currencies this festive season and into the next year.
In November, inflation stood at 255 percent, one of the highest in the world. But Mugano predicts that inflation and exchange rate could more than double by the second quarter of 2023.
“Zimbabwe is entering a very volatile social and economic period which needs level political minded leaders to handle this with care, but I don’t see [the authorities] having that capacity to think straight in terms of management of the affairs of Zimbabwe,” Mugano said.
There is also the matter of power cuts nationwide occasioned by reduced electricity generation at its hydroelectric power plant, Kariba Power Station, owing to low dam water levels.
As a result, industries and households have been bearing the brunt of rolling power outages that last for as much as 20 hours daily.
Authorities hope refurbishment work at its Hwange Thermal Power Plant will add 300 megawatts to the national grid by the end of the first quarter of 2023.
Zimbabwe, which has traditionally relied on power imports from South Africa, Mozambique, and Zambia, is now in a quandary because the region is also grappling with an enormous power deficit.
Harare-based independent political analyst Rashweat Mukundu is almost certain of heightened political instability in the months leading to the polls and after.
“I think 2023 spells political doom for Zimbabwe as there is a high likelihood of politically motivated violence in by-elections but likely to intensify towards the local council, parliamentary and presidential polls,” he told Al Jazeera.
Analysts say the elections differ from previous years because the economy is worse than ever, and inflation and unemployment are at record highs.