Zimbabwe is Down to Its Last 217 Dollars

Chances are, you had more cash on hand than the government of Zimbabwe did last week. Zimbabwe’s Finance Minister admitted that at one point last week the Zimbabwean government only had $217 dollars in its accounts. For a country of nearly 13 million people that amounts to only .001 of a penny per person.

Given the state of the world economy and the fact that Zimbabwe remains one of the poorest countries in Africa this paltry bank account should probably come as no surprise. Still, the thought of a government responsible for the fate and well-being of 13 million people having only 200 dollars in cash on hand is discerning, to say the least.

While Zimbabwe is one of the poorer countries in Africa and has long been ruled by military strongman Robert Mugabe who has been accused of rigging elections and suppressing opposition leaders. After a controversial land reform initiative pushed by Mugabe in 2000, the United States and other nations have placed economic sanctions on Zimbabwe. The land reform saw large amounts of lands seized from private companies and the families of past White settlers given to poor Africans.

Mugabe has been challenged on numerous occasions but has so far maintained control. After accusations of fraud in the 2008 elections, Mugabe reached power sharing agreements with his rivals and has since maintained a tenuous grip on power. This agreement has so far held strong and has helped stabilize the nation though the economy remains stagnant and the unemployment rate is believed to be in access of 60 percent.

Zimbabwe has long suffered from hyper inflation; however, in 2008 the nation switched currencies and is now using the dollar for its currency. This helped curb inflation but the rest of the economy remains weak. An estimated 70 percent of the country now lives in poverty and the public debt already rests at over 200 percent of the GDP.

Now Zimbabwe is looking from some $200 million in donations to hold a referendum on a new Constitution. This new Constitution is the result of negotiations and guidance from the United Nations and supposedly will help foster an environment of peace.

Where will Zimbabwe come up with 200 million dollars? Given that the rest of the world is still recovering from a global economic slow down and that Zimbabwe has already alienated both the United States and the United Kingdom, two potential donors, it is unclear where the funds will come from. Potential donors from the rest of the Western world are struggling to pay down their own debts.

Zimbabwe asked South Africa for $100 million last year but so far has heard no reply. Given South Africa’s own problems with poverty and crime such a large donation is unlikely. The Chinese on the other hand have shown a heavy preference for contributing to infrastructure projects, not supporting democracy. Meanwhile Japan is struggling to reduce its own debts and both the IMF and World Bank have been preoccupied trying to contain any potential financial crises.

On a positive note government accounts only rested at $200 for one day before $30 million  in revenue came in. While $30 million is certainly a lot more than $200, for such a large nation this sum remains paltry and well below the funding levels needed to both fund the government and hold a referendum.

Whether or not these referendums are actually held remains to be seen. Many potential donors will likely see the referendum as pointless and unlikely to bring about any concrete change. While Zimbabwe may not quite yet be broke, the overall condition of the nation remains dire.