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Zim mutation: Mnangagwa has his work cut out for him

23 november 2017

The trouncing of the Movement for Democratic Change (MDC) led by Tsvangirai in the 2013 elections saw the ruling Zanu-PF regaining total control of government and parliament following four years of an uneasy government of national unity.

The ruling party, led by former president Robert Mugabe, came up with an economic blueprint that it called the Zimbabwe Agenda for Sustainable Socio-Economic Transformation (Zim Asset), which was crafted to achieve “sustainable development and social equity anchored on indigenisation, empowerment and employment creation”.

However, the party quickly diverted its energy from pushing the country’s economic recovery to fighting for the succession of Mugabe, who ironically refused to name a successor or indicate as to when he would exit the political stage.

Then vice president Joice Mujuru, who clearly had an upper hand over Emmerson Mnangagwa in the succession race, was booted out after a series of attacks by Grace Mugabe, the then first lady.

She was accused of trying to kill Mugabe and for being “corrupt, a gossiper and lazy”.

Mnangagwa replaced Mujuru in 2014 as the country’s vice president, but was again a target of Grace’s bravado and abrasive politics as she openly showed her willingness to succeed her husband.

He smiled as Grace Mugabe attacked and humiliated him in public.

She called for his political head in a silver platter and her husband delivered it to her on 6 November as he sacked Mnangagwa for being disloyal among other ills.

He, however, fired back two days later saying the party was not Mugabe’s personal property.

“We must reject this insane and ‘idiotic’ habit of expelling and suspending members of the party merely because we differ in opinion or have brighter and more progressive ideas of improving the lives of our people,” Mnangagwa said.

He vowed to challenge Mugabe, whom he described as a “stubborn individual who believes he is entitled to rule this country until death”.

“You and your cohorts will instead leave Zanu-PF by the will of the people and this we will do in the coming weeks as Zimbabweans in general now require new and progressive leadership that is not resident in the past and refuses to accept change,” Mnangagwa said while hiding in South Africa as he alleged that his life was under threat.

“…I will be communicating with you [Zimbabweans] soon and shall return to Zimbabwe to lead you.”

True to his word, Mugabe was stripped of his party leadership two weeks later and replaced by Mnangagwa, who is known as the “crocodile”.

This was after a coup attempt by the military, which saw Mugabe being placed under house arrest while ministers who supported him in dislodging Mnangagwa fled the country.

A massive protest, called for by the war veterans of the guerilla war and backed by the military, followed on 18 November.

Mugabe was given an option to resign by 12 noon on 20 November to pave way for Mnangagwa, but he ignored the ultimatum, leaving his party and the opposition initiating an impeachment process on 21 November.

However, as MPs debated the motion, Mugabe tendered his letter of resignation to the speaker of parliament, who read it to the august house, sparking wild celebrations across the country.

With Mugabe gone, Mnangagwa would be sworn in as Zimbabwe’s second president in 37 years, on 24 November ahead of elections next year.

Mnangagwa doesn’t come with clean nose himself.

He stands accused of masterminding the massacre of thousands of civilians in the Matabeleland and Midlands provinces in the early 1980s together with Mugabe under the guise of pursuing perceived PF-Zapu dissidents.

He was also once investigated by the United Nations for illegal exploitation of natural resources from the Democratic Republic of Congo when Zimbabwe sent its troops to defend the late Laurent Kabila’s government.

Mnangagwa was the country’s defense minister when Mugabe joined the DRC war.

The UN recommended a travel ban and financial restrictions on Mnangagwa over his alleged involvement in making Harare a significant illicit diamond trading centre, according to Newsday.

He was also the defense minister when the army was involved in Marange diamond mining through a joint venture with the Chinese.

It wasn’t known whether he personally gained from the diamonds, but his nemesis, Jonathan Moyo, who was a minister in Mugabe’s government once claimed that the Chinese had built a house for Mnangagwa using diamond proceeds.

Although, he doesn’t have much time before the next elections, it would also be interesting to see how he would reform the mining sector in particular and the economy in general, as he accused the former president of resisting reforms and being “stuck in the past”.

A jewel soiled?

When Zimbabwe attained her independence in 1980 after a protracted liberation war, there was hope that the country would learn from other independent African countries’ experiences on how not to collapse a well-functioning economy.

The late President Julius Nyerere of Tanzania is famed for having advised the then Prime Minister Robert Mugabe to “preserve the jewel in Africa” he had inherited.

Samora Machel, the late President of Mozambique, also advised his ally on the eve of independence, “to avoid being driven by revolutionary zeal and learn from Mozambique’s experience when it chased the Portuguese from the country and nationalized the economy”.

According to Godfrey Kanyenze et al in their book, “Beyond the Enclave”, the country (then Rhodesia)’s per capita GDP was more or less at the same level as those of South Korea and Thailand during the 1950s and 1960s, but by 2003, South Korea’s per capita GDP was “almost sixteen times larger than Zimbabwe’s, and Thailand’s was seven times greater”.

The elements for successful development appeared to be in place at the time of independence in 1980, including a relatively modern infrastructure and an educated workforce.

The country then adopted a centralised economic policy – directly controlling some areas of production, intervening heavily in others with price controls and subsidies, and building a large, costly and inefficient administrative sector.

The difficulties of the adjustment process, periodic weather-related downturns in farm production, low commodity prices and poor fiscal and monetary management all factored in to create a pattern of uneven performance, according to the 2007 edition of Zimbabwe Review.

As a result, Zimbabwe's economy has deteriorated since the late 1990s with real GDP declining sharply, inflation soaring, and investment falling substantially.

What emerged after the “crisis began in 1997 can hardly be described as a coherent and credible set of policies as government resorted to populism, implementing knee-jerk policies on the spur of the moment”, according to Godfrey Kanyenze et al.

A penchant of un budgeted expenditures emerged, beginning with the reward of a gratuity and pension to each of the 50,000-strong war veterans at the end of 1997, and followed by the entry into the DRC war in August 1998, inter-alia.

As a result, the budget deficit, which had been targeted to decline to 3.8 percent of GDP by the end of 2000, shot up from about 6 percent in 1998 to 18 percent by the end of 2000.

Furthermore, the violent implementation of fast-track land reform in 2000 aimed at benefiting landless black Zimbabweans led to sharp falls in production and the collapse of the agriculture-based economy.

During the period of negative economic growth (1999-2008), the economy declined by a cumulative 51 percent.

Further funding by the International Monetary Fund and other donors were put on hold in waiting for Zimbabwe to take effective action to restructure its economy.

World-renowned currency expert Steve Hanke et al argued in 2009 that Zimbabwe’s hyperinflation of 2007–2008 represented “the first episode in the 21st century and the world’s 30th hyperinflation”.

After falling below the 50 percent threshold in July, August, and September 2007, inflation soared, peaking at an “astounding” monthly rate of 79.6 billion percent in mid-November 2008.

At that point people simply refused to use the Zimbabwe dollar and the hyperinflation came to an abrupt halt.

The introduction of a basket of currencies – just before a government of national unity (GNU) in 2009 – to replace the useless Zimbabwe dollar helped put breaks on the rampant inflation.

However, the introduction of a surrogate currency known as bond notes had resulted in inflation ticking up again, albeit at a slower rate compared to the 2007-2008 period.

Officials said it was at par with the US dollar, but black rates were now ranging between $1.40 to $1.60 for every one US dollar.

Mnangagwa, will no doubt, have his work cut out for him and Zimbabweans as well as the investors will be watching closely with much interest.

Mathew Nyaungwa, Editor in Chief of the African Bureau, Rough&Polished