Where do we go from here?

This past weekend we saw the conclusion of the long awaited Zanu PF Conference at the Victoria Falls. It had been closely watched with great expectations as prior to the conference there had been a great deal of maneuvering within the Party. The central issue was the issue of succession with the State President, now 93 years old, showing increasing signs that he is unable to handle his responsibilities in the way he has in the past. Also there were conflicts over the issue of the need to have a woman in the Presidium and the questions of the policies being followed by the Ministry of Finance.

In the end it was a complete anticlimax – the issue of the succession was simply squashed – the resolution reached was that Mr. Mugabe would be the party’s Presidential candidate in 2018 by when he will be 96 years old. No changes were agreed to the Presidium and no changes were adopted to policies – they decided they would carry on as before.

The problem with this stance is that it leaves the country in a state of limbo. The failure to come to grips with the succession issue means increased uncertainly for everyone. The various elements in the Party with aspirations remain engaged with the issue, they know full well that the old man is at the end of his long career and that leadership change is inevitable. The problem for the country is that should the inevitable happen soon – the contestants, like a family in a situation where the father has died without a will, might descend into conflict. Conflict in a family can be very vicious.

Then there is the issue of the demand for a woman to be brought into the Presidium. This is a clear conflict between two powerful factions in the Party – the one led by Grace Mugabe and the other by Emmerson Mnangagwa. This is not going to go away and will further exacerbate the sense of national uncertainty and the potential for conflict. The outcome all depends on which way the Old Man will move in support of one group or another.

Then there was the issue of future economic policy. The country is now clearly in the grip of a serious economic contraction caused by erratic and inconsistent policies and difficult macro economic conditions. Business confidence is at an all time low and incomes and tax revenues are declining.

It is clear that the Minister of Finance has a clear understanding of what changes are needed and he has spelt these out repeatedly over the past three years. However elements in his Party are not happy with his stance and key issues such as the debt management strategy are encountering significant opposition. In addition his call for indigenisation policies to be revamped so as to make them more acceptable to investors is falling on deaf ears. In fact the President stated at the Falls conference that mining companies would be required to comply with the indigenisation laws by the 1st of January or be closed down.

Nobody would object to empowerment strategies that did not disturb management or policy control and brought fresh capital into the business. In fact most companies would be delighted to invest in a country where they only had to put up half the capital required. But this is not what the Indigenisation Act says – it says quite clearly that all firms are required to “cede” 51 per cent control to indigenous Zimbabweans who by definition are “previously disadvantaged persons”. It says nothing about paying for the equity stake or increasing your investment when called upon to do so to fund growth. It says nothing about control and policy and under these conditions, nobody, no investor is either prepared to invest or maintain their investment if such conditions are imposed on them.

A bit like the infamous “Mulungushi Declaration” by Dr. Kaunda in Zambia after Independence when the Zambian Government demanded majority Zambian ownership for any firm employing more than 100 people. The result was that the Zambian economy simply stopped functioning. Over the ensuing decade Zambia slumped into a persistent decline and output from the mining industry declined over 90 per cent. Only in the past decade have these disastrous policies been reversed and the mines privatized again with Zambia now exporting $13 billion a year and the country experiencing rapid growth and development.

As if all of this was not enough we have had a very poor start to the wet season – virtually no rain with very high temperatures right through until this week. All planting is delayed and the prospects are for another record low in farm output. In South Africa things are even worse, last week Maize prices hit an all time high of R4100 a tonne – double the normal price. Zambia closes its markets in January and Zimbabwe is going to have to look overseas for imports of essential grains.

Where to go from here we might all ask? Well for a start the performance at the Fall’s has ruled out any form of internal reform and change that might restore confidence, bring in new business and get us out of the mess we are in at present. I see no chance of any change to the downwards trend in the local economy and continued falls in living standards and incomes.

But worse than that I see no chance of any real change here unless someone comes into the situation and forces changes, I had thought that the Chinese Premier might do just that – but all we saw was a short private discussion over tea and nothing else that we can read as being any attempt to get Mr. Mugabe to see sense. South Africa seems totally preoccupied with the collapse in the Rand and the failure of their own leadership.

So that leaves us to our own devices and initiatives. Grace Mugabe is clearly on a roll – this past weekend she held a rally in Matabeleland South and when she arrived she brought the following goodies with her: 220 tonnes of maize, 120 tonnes of rice, 13 tonnes of soap and washing power, 5 tonnes of used clothing and 3 tonnes of salt with 1,8 tonnes of cooking oil. That is 40 truckloads of commodities which she handed out to several thousand bewildered peasant farmers and their families.

Now I am sure she did not pay for any of that treasure trove herself – her own companies are heavily in debt, so I have to assume she obtained much of this stuff from the State and extorted the rest from the private sector. If she carries on like this the cost to the State of her personal campaigns will run to many millions of dollars. She came out of the Zanu PF conference on top – her opponents and others falling over themselves to bow and scrape. Clearly she sees herself as just below the President and exercising his authority in realms where she has no legal standing at all.

A new report on incomes drawn from a survey done in July this year shows that incomes in Zimbabwe continue to slide and in rural areas they are now at 50 US cents a day per capita – for everything. In a country with all this potential and natural resources this is an astonishing achievement – almost as if the State has set out to deliberately impoverish the people who continue to live here – almost like a massive collective punishment in a Prison Camp. Grace behaves like a visitor who throws sweets over the fence to the starving inmates. She better be careful that the inmates do not break out while she is within reach.

Eddie Cross
Harare 15th December 2015