Govt Policies worsening the economic crisis in Zimbabwe - UN Experts
Harare, Zimbabwe (PANA) – The Zimbabwe government’s policies are worsening the country’s economic crisis, causing immense hardship for the poor and crushing human rights of those who complain, UN experts have warned.
Since October 2018, the government, in an attempt to fix fiscal and monetary imbalances, instituted austerity measures that included a 2 percent transfer tax and in February 2019 a reintroduction of a local currency, both of which have eroded individual monetary values by three times.
“Government policies in Zimbabwe are worsening the country’s economic crisis, causing immense hardship to those less well-off, and crushing the human rights of those who dare complain,” the UN experts warned in a statement.
“We are gravely concerned that, as the situation in Zimbabwe deteriorates, the Government is pushing people further into poverty. We are not aware of any Government measures to provide even minimal safety nets for those who are already living on an economic cliff-edge and who will suffer the most from these regressive policies.
“The impact of economic reforms on human rights must be assessed against international norms and standards, in line with the Guiding Principles, on human rights impact assessments of economic reforms,” the statement said.
To legalise the RTGS dollar introduced in February, government gazetted Statutory Instrument 33 of 2019 which provided the legal guidelines for the use of the local currency.
However, under section 4 (1) D to F, every asset or liability expressed in RTGS dollars before the reintroduction of local currency was to remain the same effectively allowing companies to keep salaries unchanged as it is a liability.
Further, with 95 percent of the economy being cashless, most Zimbabweans have resorted to money transfers as a means of transacting; however, the 2 percent transfer tax has made it more costly to transact.
The impact of these measures comes as the Consumer Council of Zimbabwe (CCZ) reported a 1.21 percent increase to RTGS$790.77 last month in the cost of living based on the requirements for a low-income earner for a family of six from February’s RTGS$781.35 comparative.
So, while incomes have remained stagnant, the cost of living is rising on a month on month basis.
In the past two weeks alone, the market has seen wanton price increases of between 10 percent and over 100 percent across the 10 provinces in Zimbabwe.
The Manicaland Province recorded the highest number of price increases, ranging between 10 percent and 31 percent, Matebeleland region (5% and 75%), Midlands region (2,7% and 95%), and Mashonaland region (17% and 184%), according to the CCZ.
The UN experts warning government of its policies on the economy consist of Special Rapporteurs and Independent Experts that are part of what is known as the Special Procedures of the Human Rights Council.
Special Procedures, the largest body of independent experts in the UN Human Rights system, is the general name of the Council’s independent fact-finding and monitoring mechanisms that address either specific country situations or thematic issues in all parts of the world.
“The Government of Zimbabwe has expressed its intention to cut its fiscal deficit by half in 2019, in response to a crisis fuelled by decades of poor economic governance. However, there are serious concerns about how the burdens of austerity will be shared,” the UN experts said.
“While the elite are largely protected from financial harm, those living in or near poverty are bearing the brunt of major price rises, increasingly tight monetary policies, and regressive tax measures announced in the latest budget."
The fiscal imbalances stem from government spending more revenue on non-critical areas of the economy than on critical ones, leaving officials unable to prioritise economic growth.
For example, in 2018, government reported the fiscal (or budget) deficit was US$2,86 billion though the Parliament Budget Office places the figure at US$3 billion, showing a huge expenditure for the broke government with few resources to back it.
The monetary imbalances originate from an increase in the money supply to US$11 billion in electronic funds with less than US$1 billion hard cash to back it, before the reintroduction of local currency.
As a result, leading human rights organisations have warned of “an increasing risk of a humanitarian crisis”.
“Credible reports of a disproportionate crackdown on protesters expressing legitimate concerns indicate the Government is shutting down debate and doubling down on its troubling policies,” the UN experts said.
Already, Zimbabwe ranks 107th out of 119 countries on the Global Hunger Index, with 72 percent of the population living below the poverty line, according to the UN experts.
The World Food Program also estimates that more than 2.4 million people will face food insecurity in 2019.
Access to basic water and sanitation services has declined over the last 15 years, with more than 60% of the population lacking access to sanitation services.
-0- PANA RA 6Apr2019
