The Leopard has not changed its spots
When Zanu PF rolled over MDC in 2013 and gave Mr. Mugabe another 5 year term they could never have anticipated the immediate consequences. After 4 years of growth and recovery and rising confidence in local and international circles, the country went into mourning and markets crashed. In six months $3,5 billion dollars fled the economy and a third of all Banks closed their doors.
In the next two years, revenues to the State and the formal GDP declined by 37 per cent, business confidence sank out of sight and company closures and severe liquidity problems persisted in all sectors. It was clear by the end of 2013, that we needed substantial budget support if we were to survive.
In 2014, the State concentrated on trying to persuade its friends, especially China, to assist with the growing fiscal crisis in the form of a grant for budget support and significant new investments. All efforts failed and in desperation, and perhaps under pressure from creditor States and allies, they reluctantly turned to the international community and the IMF.
The engagement had started in 2012 when the GNU authorized an effort to restore relations with the Multilateral Agencies to secure debt relief and new financing. Reluctantly Mr. Mugabe allowed the Minister of Finance to continue the effort and the Fund began the long process of restoring confidence in Zimbabwe as a debtor State. Although the Fund’s engagement in the process was always technical and financial, the politics played a key role as the major shareholders in the Fund would not allow reengagement and support unless the Zimbabwean Government agreed to tough reforms in political, human and other key areas.
The process is never fast or easy and the mating rituals with the Fund led off in the form of two periods of a “Staff Monitored Programme”. Double speak for “let’s get to know each other before we announce our engagement”. Everything went to script until the 4th May 2016. In September 2015 the two families announced that an engagement was in the offing and the Lima Agreement was signed. This resulted in a meeting of the full Board of the Fund on the 2nd of May 2016 where, for the first time in nearly 20 years, Zimbabwe was put on the agenda.