Zimbabwe's economic pain is set to continue as President Robert Mugabe's government remains fixated on a power struggle that has claimed the scalp of Emmerson Mnangagwa, his former deputy, who he expelled from both government and the ruling Zanu-PF party this week.
The impact of Mnangagwa's exit is most likely to be felt in the further erosion of the little remaining business and foreign investor confidence in the country.
Mnangagwa had endeared himself to the business community at home and abroad and had become the poster boy of economic reform.
Given that there are few economic markers available to gauge market sentiment in Zimbabwe, Mnangagwa's presence in government was seen to have provided some assurance to foreign investors.
The country does not have an official currency of its own to track reactions to political events.
The local bourse, the Zimbabwe Stock Exchange, is also not an accurate reflection of any confidence in the economy.
In fact, much of the bull run that has hit the stock market lately has been driven by fear as the biting two-year cash crisis persists, rather than any uptick of the economy.
Tara O'Connor, the director of Africa Risk Consulting in London, said Mnangagwa was a man who was "dangerously persuasive" in his quest to cast himself as an economic champion.
"Yet, I think the international community has so little real traction with Mugabe and Grace that they would talk to anyone to keep basic services like hospitals and schools going," said O'Connor.
In his three-year tenure, Mnangagwa stitched together a reputation of having the ear of foreign investors and is widely seen to have also been instrumental in the thawing of frosty relations with Western diplomats in Harare, particularly those of the former colonial master, Britain.
This spending spree
— Piers Pigou Southern Africa director International Crisis Group
sends a strong signal
where priorities lie.
Mnangagwa's economic reform and inclusivity stance was a notable departure from Mugabe's often hardline position against the West, which had a falling out with Mugabe sparked by the violent farm seizures of 2000.
By extension, some of Mnangagwa's allies in government, such as Patrick Chinamasa, the former finance minister, emerged as symbols of possible economic reform in the ruling party.
As finance minister, Chinamasa shuttled between Harare and the world's financial markets in London and Washington in search of new lines of credit.
He also kick-started a programme to settle Zimbabwe's nearly $7-billion (about R100-billion) debt to the World Bank and IMF. Last year, Zimbabwe paid $110-million towards the debt owed to the World Bank, the first such payment of its arrears in nearly two decades.
Chinamasa also tried to curb government expenditure on its civil servants wage bill and had proposed a freeze on bonuses - as part of measures to reduce expenditure on salaries, which consumes 97% of all monthly revenues - but faced resistance from Mugabe.
With the main actors of economic reform in the Mugabe-led administration now pushed aside, the question is: what course will the failing economy take?
Mugabe ally Ignatius Chombo was recently appointed finance minister and is expected to deliver his maiden budget statement for the next fiscal year later this month.
However, in the few weeks that Chombo has been in charge of the Treasury, he has shown no signs of restraint and a willingness to bend over backwards to meet the various demands in his in-tray.
Recently, Chombo caved in to calls from parliamentarians for a $5-million payment in allowances.
He also approved the purchase of 226 new vehicles for local chiefs.
Mugabe also gave him a one-week ultimatum - which ends today - to buy new vehicles for the party's youths to be used in election campaigning.
Piers Pigou, the southern Africa director of the International Crisis Group, said the recent developments did not inspire any confidence.
"All indicators have been that this government will continue with its current debt financing, that we know in the long run is simply unsustainable," he said.
"This spending spree sends a very strong signal of where priorities lie - Zanu-PF's priority is power retention through winning elections; and economic and financial considerations play second fiddle."
There are already signs of further trouble for the economy.
The government announced this week that - with immediate effect - the manufacturers of the country's 16 basic commodities are now expected to publish the recommended prices of their products on a fortnightly basis.
It is widely seen as a move towards the imposition of price controls, which were last imposed in 2007 and resulted in the shortage of basic commodities.
Industry and Commerce Minister Mike Bimha said the Consumer Council of Zimbabwe would publish the prices of basic commodities as it observed them through its regular surveys and intensify a consumer-education programme.
The basic commodities that have been placed on the government price watchlist include cooking oil, sugar, laundry soap, cement, fuel, flour, rice, milk, eggs, salt, beef, chicken, washing powder, bread and mealiemeal.
In its latest economic outlook report on Zimbabwe, published this week, BMI Research, a Fitch Group company, said there was a mismatch in the data released by the central bank which pointed to stability in prices; the reality is an increase in the cost of goods and services.
BMI Research estimated that inflation had risen by 60% year on year, against the Reserve Bank of Zimbabwe's estimate of 0.78% year on year.
It said the divergence from the central bank's official figures was largely a reflection of the growing shortage of hard cash circulating in the economy.
"Since Zimbabwe adopted the US dollar as its official currency in 2009, large current-account deficits and limited inflow of foreign investment have seen the supply of cash fall to the point where it has become a headwind to economic activity.
"In this environment, businesses have struggled to access the dollars needed to import goods from abroad, leading to shortages at fuelling stations and in supermarkets," its report stated.
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