The International Monetary Fund (IMF) has urged Zimbabwe to address the rampant corruption that is costing its economy billions of dollars annually, while also praising the country’s new currency for its stability. Following a recent mission to Zimbabwe, the IMF noted that the Zimbabwe Gold currency (ZiG) has successfully ended a period of macroeconomic instability.
The previous currency, the Zimbabwe dollar, had experienced severe depreciation, leading to soaring prices.
The IMF indicated that if macroeconomic stabilization continues, Zimbabwe could achieve a cumulative inflation rate of around 7% for the remainder of the year, a rate the country has not seen in years. Persistence Gwanyanya, a member of the Reserve Bank of Zimbabwe Board, expressed appreciation for the IMF’s acknowledgment of the new currency’s role in stabilizing the economy in an interview with VOA.
“We think that there has been some notable improvements with regards to … fiscal accountability,” Gwanyanya said. “Whilst there are isolated cases of corruption that we acknowledge, the overall picture is that there has been significant improvement in fiscal management in the country. And unsurprisingly, we continue to improve. But to achieve the ambitions, we reduce the leakages, we improve … accountability further in the economy.”
In its report, the International Monetary Fund (IMF) highlighted significant weaknesses in Zimbabwe’s economic governance, noting that corruption poses a substantial risk to the country’s economic performance. Addressing this issue is imperative for economic improvement.
Last month, Zimbabwe’s Prosecutor General, Loice Matanda-Moyo, who also previously headed the anti-corruption commission, stated that corruption costs the nation nearly $2 billion annually, severely impacting the economy and ordinary citizens. The Zimbabwe Anti-Corruption Commission is currently investigating a case from last year where the electoral commission reportedly paid $1.2 million for a server that could have been purchased for less than $25,000 on the open market. The funds were directed to a company owned by an ally of President Emmerson Mnangagwa.
Economist Godfrey Kanyenze, the founding director of the Labour and Economic Development Research Institute of Zimbabwe, emphasized that reducing corruption is crucial for the improvement of the country’s economy.
“Corruption is a cancer that has to be dealt with, we need political will to address this particular issue and there is to be a price to corrupt activities. The culture of impunity must be replaced by zero tolerance for corruption, as is the case in other countries where the state has played a leadership role,” Kanyenze said.
Steven Dhlamini, an economics professor at National University of Science and Technology, said the IMF report addressed all issues that Zimbabwe needs to get on track.
“Overall, it is a very positive report, it confirms that our policy trajectory is on the right path and we are hopeful that authorities are going to continue implementing these policy measures that have been commenced since last year,” Dhlamini said.
In its report, the IMF said Zimbabwe’s economy is showing “resilience” even as effects of the El Nino drought were being felt. The economy is expected to grow 2 percent in 2024, down from 2023’s 5.3%.
