What lies ahead?

I do not like crystal balls - they are notoriously unreliable and can be misleading. But I felt that we must do some thinking about what lies ahead of us and what we all have to do to get through the next 9 months. First of all a time table.

I think that the deal being negotiated with Zanu PF under SADC tutelage will be complete by the end of October. It then has to go the SADC leadership for endorsement and confirmation from Mr. Mugabe that the deal is acceptable. Once that is done it will have to go through an acceptance and implementation phase in Zimbabwe including a Parliamentary process. This cannot take less than 6 weeks and that takes us into December. Nothing much will happen until we get the silly season behind us and that takes us into January 2008.

The deal will try to create reasonable conditions for two things - a political campaign between political parties in Zimbabwe and the subsequent conduct of a poll of all registered voters. The critical thing is how do you do this and in my view the conditions required simply cannot be created in three months. I therefore think that June 2008 will be the earliest that the actual poll can take place.

What everyone has to understand is that this is the only show in town. There is no other route back to sanity and we are stuck with this process even if we do not think it will work or we think it is a set up and we are the fall guys.

I think about the present situation and wonder if we will ever get to December, let alone March or June! Just today I had to buy 40 litres of fuel for my vehicle so that I can go up to Harare on Wednesday for a policy workshop. 40 litres cost me Z$28 million. While I was there - buying diesel from a young couple who were pastors at a Community Church in Chipinge and are now trying to make a living trading fuel from their home in Bulawayo, I bought some beef from another young man - also from Chipinge who had slaughtered three cattle and was selling the product in one kilo lots out of their kitchen. He was going to then buy fuel and head back to Chipinge.

Just look at these exchange rates - April 21 950 to US$1; May 29 167 to US$1; June 175 000 to US$1; July - no trade (price controls); August 192 300 to US$1; September 350 000 to US$1; October the 8th 585 000 to US$1. That is the devaluation of the local currency on the open market in 6 months. The dollar has devalued to 27 times its value in April 2007. Prices are again moving by the day and there is no end in sight. If my estimate of present inflation is right - about 20 000 percent per annum, we can see how rapidly the local currency is depreciating and there is no hope of the State every keeping up with the pace of change.

The DMB - operating under price control is paying its suppliers 38 000 dollars a litre for fresh whole milk delivered to its dairies. That is 45 Rand cents a litre or 6 US cents a litre. Quick way to go bust! So we have a critical shortage of milk and all milk based products. The official price of maize meal - and we consume 3000 tonnes a day, is Z$13 800 a kilogram or Z$14 million dollars a tonne. The free market price is R3 500 a tonne or Z$300 million a tonne - a direct subsidy by the State of Z$340 trillion dollars a year.

That is one parastatal on its own. Add to that the railways, ZESA and a myriad of other State controlled institutions and you know why the Reserve Bank must print money - trillions of dollars of new money every day. Money supply according to outdated statistics provided by the Reserve Bank is now over 18 000 percent up year on year - close to the estimated inflation numbers.

Bus fares are now Z$300 000 a day for most workers - they earn much less than this, on top of this they must search for food and other basics every day and pay through the nose for everything when they find it. Add to this miserable scenario the shortages of water and electricity black outs for half the day every day and you can easily understand why 4 million people have fled the country to South Africa and thousands more decamp every day. I have seen estimates of our population that put it as low as 8 million people left in the country. I think that is low, but it is certainly not the 12 million estimate I see used by the media every day.

We entered the hyperinflation League of Nations in March 2007. Only 21 countries have been through such conditions in the past 100 years. The duration of such conditions ranged from 2 months to 48 months. They all recovered from this nightmare in a comparatively short time by adopting a fairly standard series of reforms and these were either adopted by the party in power and implemented (Mozambique) or they were implemented by a new government once the old regime had been overthrown or voted out of office (Zambia).

My own guess is that Zanu PF is now incapable of making the painful changes that are required to get things right again. The man in charge is beyond it all and the succession struggle is tearing Zanu PF apart. Zanu PF is committed to the course they have set and they have no alternative strategy. Their most recent grand recovery plan is simply not worth the paper it was written on. Therefore I think we are stuck with hyperinflation until the elections. That will mean that Zimbabwe will have to cope with these horrendous conditions for another 9 months, at the very least.

How do we cope? Individually we will simply have to go on making a plan and getting by on a daily basis. In our business lives those of us who want to be here and ready to take advantage of the turn around must also strategize and ensure that our business survives. Operate on a cash basis and watch the fundamentals every day. Do not give in to the intimidation or price controls and resist the so-called 'indigenisation'.

If the SADC process is the only game in town, then the MDC remains the only organisation that can unseat Zanu PF in the coming election. I think we are going to get a shot at that for the first time under reasonable conditions. You should play your part in that process - we need your help and cooperation. We must restore the political structures destroyed by the State across the country, campaign for the hearts and minds of the voters and prepare to effect the turn around that we are all looking for after the election has done its thing.

I can tell you that the leadership of the MDC is doing their bit - we are working around the clock and making sacrifices to get things moving on the ground. We are taking risks on a daily basis and in some instances putting our lives and freedom on the line. What are you doing? No point in moaning and complaining - our future has always been in our own hands, this time we at least have some external assistance and support - even if it is conditional and half hearted.

Eddie Cross
Bulawayo, 8th October 2007