Zimbabwe finance minister Mthuli Ncube seems to be doing everything by the book as he pursues orthodox economic policy often prescribed by the global Bretton Woods lending institutions to try to turn around a sickly economy.
Ncube, a former chief economist at the African Development Bank, agreed to a staff monitoring programme with the IMF in May, under which Harare promised not to borrow offshore and to cut reliance on the central bank to finance deficits. Meanwhile, a severe drought has left a third of the 15-million population needing food aid, further pressuring prices.
Though Mugabe was ousted after a de facto coup in 2017, many doubt that Zimbabwe’s new rulers can deliver the economic change they seek because they are the same people who propped up the former strongman for decades. But the bank’s governor, John Mangudya, acknowledged at a meeting with business leaders last week that there is lack of confidence. “I don't know why,” he added to much laughter from the audience.
On Tuesday, less than a month after ending dollarisation, the government made another U-turn, announcing that hotels in the resort town of Victoria Falls could charge guests and pay electricity bills in dollars.