No, Cde President; it is smouldering!

via No, Cde President; it is smouldering! – DailyNews Live 22 July 2014

HARARE – President Robert Mugabe’s statement that the economy is recovering is quite jarring.

This is so because there is nothing on the ground which suggests the recovery which the Zanu PF leader referred to on Sunday.

Instead, the economy is in a tailspin caused by a cocktail of problems including lack of trust in Mugabe and his Zanu PF government.

We would have expected the nonagenarian leader to explain convincingly the steps that his government is taking to stop the current economic haemorrhage.

Zimbabwe’s leadership needs to desist from this tendency of making loud statements that are not backed by strong results.

Just yesterday, the Zimbabwe Revenue Authority (Zimra) released its half year report in which it missed its target.

Zimra collected $1,72 billion in taxes in the half year to June 2014, against a target of $1,74 billion, resulting in a negative variance of one percent.

The under-performance of the Vat revenue head was attributed to the fall in industrial capacity utilisation which has resulted in reduced production of goods that attract Vat and a decline in disposable incomes as some companies are retrenching, closing or failing to award meaningful remuneration increments to their employees.

And revenue is expected to remain depressed until industrial capacity utilisation improves.

Three weeks ago, the International Monetary Fund (IMF) revealed that government had missed most of its targets under the Staff Monitored Programme (SMP) which is aimed at helping Zimbabwe towards recovery.

The IMF said it could extend Zimbabwe’s SMP deadline for the second time as the country had missed a number of targets due to a deteriorating economy.

Zimbabwe agreed to this programme which focuses on putting public finances on a sustainable course, while protecting infrastructure investment and priority social spending, strengthening public financial management, increasing diamond revenue transparency, reducing financial sector vulnerabilities, and restructuring the central bank.

Most of these targets have not been met despite an improvement during the time of the inclusive government, the same time that the SMP came into effect.

The country’s debt has ballooned by nearly 40 percent to $9,9 billion, dashing hopes of quick recovery.

The external debt stood at $8,9 billion as at December 31, 2013, which is 69 percent of the country’s Gross Domestic Product (GDP), and the total domestic debt stood at $ 994 million, constituting eight percent of GDP.

These are not signs of a recovering economy.

Instead, the situation on the ground shows an economy on the brink.