Harare - A power-sharing agreement between Zimbabwe's main political rivals is unlikely to bring immediate relief to millions of Zimbabweans amid galloping inflation, analysts said on Tuesday.
The historic deal signed on Monday will see power shared between President Robert Mugabe and Morgan Tsvangirai in a new post as prime minister, with splinter party leader Arthur Mutambara named a deputy prime minister.
Over the past decade, the country's economy has shrunk by at least 65%, the manufacturing sector is operating at below 30%, and the official inflation rate hit 11.2 million percent in June.
But Harare-based economist John Robertson said the downward economic spiral would continue for some time.
"Despite the deal, this year's economic shrinkage will be worse, confidence in the country is low, there has been a lot of skills flight," Robertson said.
Tsvangirai cheated?
"The change is going to be very, very slow. The changes are going to take some months, every battling Zimbabwean will still be battling tomorrow.
"It looks like Morgan has been cheated in this deal, they (MDC) don't have anything other (to do) than to shuffle papers and that's it," he added.
The new government will be saddled with a $4bn external debt and a domestic debt of $79.9m.
It will also inherit a free-falling currency that has been revalued twice over the last three years with 13 zeros removed to make it more manageable.
Under the accord, the three parties agreed that they would work together on the single most pressing issue facing the country.
"The government will lead the process of developing and implementing an economic recovery strategy and plan," reads part of the agreement.
Issues of production, food security, poverty and unemployment, as well as the challenges of high inflation, interest rates and the exchange rate compete for space at the top of a crowded agenda.
Professor Anthony Hawkins at the University of Harare said Zimbabwe's economy would start growing in the first half of 2009 with the help of foreign assistance.
"But getting back to where we were in the 1990s, it would take us another 10 years and getting back to the 1980s, it would take us another 15 years."
In really bad shape
Hours after the signing of the agreement on Monday, the International Monetary Fund, which ended dealings with Harare in 2006, announced it was ready to hold talks with the country's leaders.
IMF head Dominique Strauss-Kahn said the deal "paves the way for a new government that can begin to address the economic crisis."
While welcoming the IMF's comments, Witness Chinyama, an independent economist, also ruled out an immediate economic turnaround.
"Changes in the economy are not going to happen overnight. Some of the key drivers of the economy, such as agriculture and manufacturing, are in really bad shape," he said.
"There is the need for a major policy shift, there is a need for political will. It's not that the previous (government) did not know what they were doing, it's just that they chose political survival at the expense of economic survival."
Dumisani Ndlela, business editor of the weekly Financial Gazette, warned there will be no economic respite soon unless the inclusive government is supported by major multilateral institutions.
"The biggest challenge that faces this deal is that it needs to be financed by institutions from the European Union and the Americas who have deep pockets," he said.
"But for now they have adopted a wait-and-see attitude, which might force this unity government to resort to printing money, which again is inflationary."
The southern African nation's economy has been rocked by spiralling unemployment and an acute shortage of food and essential goods blamed partly on controversial land reforms undertaken by Mugabe's government.
- AFP