Skating on thin ice

The political transition initiated last year by the attacks on the Mujuru faction in Zanu PF leading to her dismissal from the post of Vice President and the appointment of Emmerson Mnangagwa as senior Vice President, is still underway but is very fragile. This fragility has several sources but in the main concerns the need for Mnangagwa to maintain momentum if he is to stay on top of the ice and not fall through.

One reason for the thinness of the ice and therefore the need for momentum is the fact that the underpinning foundations of the administration that is emerging are, to put it mildly, inadequate for the task at hand. This was no democratic transition to new leadership; it was in many ways a coup. The new team does not have democratic credentials and will therefore struggle to gain and maintain credibility with the international Community.

Another reason for the fragility is the presence of the “First Lady” of the land who has returned from a lengthy visit to the Far East and has been ill and who, based on her performance before the December 2014 Zanu PF Congress, is a destabilizing force capable of serious damage if she is not managed. The ability or even the willingness of the President to reign in his wife seems constrained and the suspicion exists that he somehow condones her activity.

Mr. Mugabe retains a great deal of power and authority in Zimbabwe, now bolstered by the fact that he is both Chairman of the SADC and the AU. Here he has constitutional authority and has sole signing powers on many issues, he cannot be ignored or bypassed and if he does not go along with the reform agenda that is required to keep on top of the ice we are all skating on, then the whole thing could collapse and sink.

Adding to this climate of uncertainly is the activity of the elements in the country that have been alienated and marginalized by the blitzkrieg carried out against Mrs. Mujuru in the second half of 2014. These must be controlled or managed and if not, then they have the capacity to destabilize the regime that is just taking shape. If not banished to outer Mongolia these elements could actually threaten our much vaunted and prized stability. That is a pity, but it is the harsh reality.

My own problem is that I see no alternative to the new leadership now trying to assume control of the State, clearly they have succession in their hands and it is increasingly clear that Mr. Mugabe has fought his last election. He will not stand in 2018 and it is essential that he give the new leadership both space to act in what they regard as their best interest and to prepare for another tough electoral contest – one which may be held under very different circumstances.

Since he came back from leave the President has put the brakes on in regard to the reform agenda including urgently needed changes in the composition of the Cabinet. He is protecting some of his old colleagues and has curbed the efforts to put our economic house in order. This does not help as the leadership has to establish and maintain momentum or fail.

I do not think that what has transpired in the past six months is reversible – the Mujuru elements in Zanu PF are finished and their efforts to claw back a place in the upper echelons of the Zanu PF Party are futile, even dangerous for them. They might consider the formation of a new Party but that also might be futile – I can see little prospect of a new “reformed” Zanu PF gaining traction any time soon. In fact right now the only democratic formation that has any significant national support at grass roots level is the MDC led by Morgan Tsvangirai. I think most people now accept that the “renewal” team is going nowhere and that the Ncube group hardly exists, following their Secretary General resigning last week.

The new team at the helm in Zimbabwe has two fundamental and immediate problems – the first is how to get the economy moving. It is very revealing that despite the dramatic developments in national leadership and many statements that change is on the way on key issues, that the markets remain completely dead. The stock market, a very sensitive barometer of investor sentiment remains depressed at very low values (about 20 per cent of asset value). Property prices also remain depressed and I hear of many deals involving company liquidations and forced sales of commercial and industrial property at 10 per cent of estimated or book values.

The fragility of our banking industry remains and there may be further bank closures in the near future. Certainly the liquidity situation remains critical and the costs of borrowing, prohibitive. Revenues to the State continue to shrink and are now 15 to 18 per cent below their peak in 2013 when the GNU collapsed.

The new Minister of Finance does not get much sleep these days and is borrowing on the local market in a desperate attempt to cover costs. In 2014 he ran a 22 per cent deficit in State spending and it looks as if that might be exceeded in 2015 if things carry on as they are. The ice is very thin in this respect.

Much fuss is being made of the arrival of two business delegations – one from the UK and the other French, this together with the announcement of a resumption of aid under the European Development Fund and a lifting of restrictions on travel for all except King and Queen Mugabe, has got Zanu PF all of a twitter – but the real power brokers on Zimbabwe, the UK, USA and Germany remain silent and uncommitted. They want to see what the new regime in Harare has to offer in terms of political reform.

In a very real sense, what is happening is that we have stumbled (in typical Zimbabwean fashion) into a second phase of the transition initiated by the SADC States in 2007 and implemented in the GNU. The only thing that is different is that the power center for the GNU was Pretoria and now it sort of floats between London, Washington and Berlin. The ice is very thin in this respect also and very sensitive to heat from any source!

So what does the new team at the helm of State need to do to stay on top? Clearly all the issues are urgent and we cannot afford to stand still for any length of time on anything. The IMF SMP is running – deadlines are arriving fast and are not being met, this has to be corrected, but how? The new team needs to reveal their hand on many key economic issues to get the investor community interested and working – clearly the fiddling going on with indigenisation policy is not working, the ongoing farm invasions and violations of property rights and even the ownership of standing crops is a constant reminder that no one is safe here.

I know that real action is taking place on clearing the way for investment projects that have been stalled – some for more than 5 years and that these obstacles are now being dealt with and will result in some investment decisions shortly, but it’s not enough.

On the political front, is the agenda even drafted? What is the price of reengagement with the West? What are the implications of Chinese support for Western efforts to get Zimbabwe back into the house and out of the cold?

Eddie Cross
Harare, 20th February 2015