Mugabe has gone—but the Zimbabwean economy is perilously close to the edge

Two days before Zimbabwe celebrated 39 years since independence in April, citizens received an unwanted early birthday present: the cost of a loaf of bread doubled. It was yet another sign the country is sinking into an uncontrollable financial crisis that the relatively new president, Emmerson Mnangagwa, appears unable to solve.

When Mnangagwa took over in November 2017, ousting his ageing mentor Robert Mugabe, who had been there from the very beginning in 1980, he sought to show that he would do things differently, particularly in relation to the long-stricken economy.

“Zimbabwe,” he said, “is open for business.” When elections were held last year, Mnangagwa sought endorsements from the white farmers who Mugabe always rallied his base against to reaffirm his grip on power. Mnangagwa sought better relations, too, with some sections of the business community who expected the post-Mugabe administration to adopt a more liberal economics.

Instead, 18 months later, critics say it’s been more of the same—more of Mugabe’s perilous, ideology-first approach on farming and commerce, combined with a brutal crackdown when the crisis leads to protests. In January, when demonstrators railed against the government’s 150 per cent fuel price hike, security forces, including the army, went door to door, raiding homes and, in some instances, assaulting those suspected of looting shops. Courts were packed with activists charged with subversion and hundreds of citizens accused of petty crimes, among them children and the elderly.

But even January’s crackdown hasn’t stopped the grumblings of discontent. Anger against the rise of basic prices is simmering. Civil servant unions recently negotiated a 29 per cent raise relieving the government, the country’s largest employer, of the threat of a mass strike. But as the government raised salaries, inflation also rose. In March year-on-year inflation surged to 66.8 per cent, up from 59.4 per cent the previous month.

Inevitably, this stirred social tensions putting the government at odds with businesses and hard-hit citizens. Vice-president Constantino Chiwenga, the general who led the army’s toppling of Mugabe, issued a chilling warning against price hikes accusing businesses of practicing “financial terrorism.” Instead of the government addressing the core economic issues, it holds up commercial bakers as financial saboteurs seeking to undermine its will.

The bakers see things differently. According to the Bakers Association of Zimbabwe, the imported ingredients required for the production of bread are increasingly expensive due to the challenge of sourcing the hard currency you nowadays need to buy it. After years of political violence, commercial farm seizures and abject mismanagement of everything else, Zimbabwe—once the region’s breadbasket—is now a net importer of food. With manufacturers depending on imported raw materials, such as wheat for bread production, prices get blown about by gales on the foreign exchange markets.

Bread now costs almost four Zimbabwean dollars (84p), well beyond the reach of many pockets. Over the past year, despite many fluctuations and the occasional downward pull by -government pricing controls, the cost has cumulatively rocketed. In a country where there is mass unemployment and the average daily income is estimated to be $4, the erosion of pay packets can easily take families below the breadline.

It’s taken Zimbabwe years to recover from the collapse of the hyper-inflation era in the 2000s when prices would shoot up on a regular basis. The introduction of a multiple currency system with the daily use of the US dollar and the South African rand, brought some short-lived stability and to some extent, the wayward spending of the Mugabe regime was curtailed under a government of national unity formed with the opposition from 2009 to 2013.

However, despite the strong hopes for an economic turnaround after Mugabe’s overthrow in 2017, for many Zimbabweans little change has come. A fresh economic crisis has seen the country run out of cash and despite the announcement of a new local currency in February, overnight queues of people sleeping outside banks waiting to withdraw their salaries or pensions continue to form.

The light promised at the end of this sombre tunnel of austerity seems to be growing dimmer, while fears of a downward spiral that will end in a recreation of the turmoil of the 2000s are becoming more vivid.

The price of bread has sparked uprisings ever since the French Revolution, and did so only recently in Sudan. Zimbabwe does not appear to be at that moment yet, but as the government’s panicked reaction demonstrates, it is only too aware of what can happen when a country goes hungry.