What’s in store for us?

Gift Mugano
Recently I received numerous emails from various stakeholders including students, non-governmental organisations, top officials from listed companies and the general populace seeking my views on Zimbabwe’s future after Zanu-PF cruised to victory over MDC in the harmonised elections.

The questions can be summarised as follows: What does the future hold for us? Are we not going back to the 2008 era? The increase in fuel prices and serious load shedding isn’t evidence of the beginning of the turmoil? Don’t you think Zanu-PF will reintroduce the Zimbabwe dollar?

Is there any chance of the resuscitation of companies under the Zanu-PF rule? Where are we going to get the money without foreign direct investments and foreign aid which was expected under MDC rule? I realised that there is a lot of uncertainty and despondence among the sympathisers of the MDCs and the continuous enquiries which have come to me have motivated me for the first time to unpack these issues in the political context for the interest of the readers.

The summary of my answers to all these emails was that there is a Zanu-PF shocker waiting! It is always very difficult to accept and believe in Zanu-PF especially if one is a staunch MDC supporter. This is not a taboo because our democratic landscape allows for that. But now, under the circumstances, all of us are waiting for the meal being prepared by Zanu-PF.

Most interestingly, many people will be shocked with the party’s Nigerian dish.
For starters, Zanu-PF is a political animal with very thick skin which has seen it all in its rough political terrain over the years. It is a versatile animal with a lot of surprises.

It is very crystal clear about what people are expecting, both those who are happy and disgruntled. And, in this regard, Zanu-PF is not under pressure at all but is coming out in full force to prove a point and to guarantee its re-election in the next five years. This is what my prophetic spirit told me what Zanu-PF will do. The starting point for the new Government is continuation of the indigenisation and empowerment drive.

This is a self-financing scheme for development, both rural and urban, as already witnessed in mining areas with community share ownership schemes. I foresee great scope for robust demand in new procurement requirements from the one that favours minority to the majority black Zimbabweans.

These two approaches on empowerment will bring money to the people! These approaches will increase circulation of money into the economy under the multiple currencies more than what the FDIs could have done because the sources are dry due to economic slowdown in Europe and the US.

The enactment of a law that compels established foreign companies to give procurement tenders to legitimate local companies especially the SMEs will not only reduce externalisation of funds but also mitigate transfer pricing which has robbed Government of billions of dollars and most importantly this gives money to the people and job creation!

This policy will not create any negative signal to external stakeholders as it is common knowledge that this is Zanu-PF policy which had been significantly implemented before elections.

Supporting agriculture

Zimbabwe agricultural sector has reached a point of take-off! Over the last decade, new farmers went through a learning curve and they are now conversant with relevant farming techniques.

What was short though was adequate funding especially under the inclusive Government. So, with the new Government, being the sponsor of land reforms, more is expected from it in terms of financial support given to this sector. In Zimbabwe, development and employment creation starts with the agricultural sector as it has both forward and backward linkages with the rest of the economy.

At least 70 percent of manufacturing inputs come from agriculture alone. The manufacturing sector also relies on agriculture as a consumer of its output such as fertilisers, seed, chemicals and implements. The services sectors such as transport, tourism and hospitality relies on agriculture. Hence, if Zanu-PF fixes agriculture, it reports to the rest of the economy.

Another area of interest is the resuscitation of the manufacturing sector. It is common knowledge that the manufacturing sector is in a dire straits and need more than US$2 billion for retooling and concessionary funds.

The incoming Government will have to turn its attention on this challenge as well but the question is where does it get the money from? One of the silent killers which became like a cancer cell in the bone marrow is weak demand due to low incomes. Here, Government will definitely increase civil servants’ salaries and its expenditure on capital goods such as infrastructure like roads, housing, hospitals, universities infrastructures, irrigation and energy. Again, the question is where will the political animal called Zanu-PF get the money from?

Sources of funding for the above programmes are likely to be domestic ones such as:

•  National Indigenisation and Economic Empowerment Fund, as already defined by the law, has shares from indigenised companies housed under NIEEF. This account then becomes a national fund which will support Government programmes — similar to sovereign wealth funds used by Botswana, China, Nigeria and Arab countries to mention a few. The challenge with this fund though is that if companies fail to declare dividends for whatever reason it will not be liquid but for what I know this not a challenge for Zanu-PF!

•  The enactment of procurement regulations that favours locals is an easy way of injecting money which will create many multiplier effects ranging from improvement in liquidity, increase in demand and widening of the government tax base!

• Strengthening of transparency in the handling of diamonds revenue to ensure that proceeds go into national coffers. Here, the Government should fast-track the new Diamond Act and advance the process under the Zimbabwe Mining Revenue Transparency Initiative — a home-grown version of the Extractive Industry Transparency Initiative standards.

•  Increase in FDIs — Excuse me, I said under Zanu-PF? Yes, under Zanu-PF! There is general consensus out there that if you can’t beat them join them! Over the last one and half decades many investors waited for Zanu-PF to go but the way it massacred the opposition this year is clear testimony that it’s not going anywhere especially after the unity Government one would have been tempted to think that the MDC has learnt tricks to topple Zanu-PF. So, investors who wasted more than 15 years for Zanu-PF to go are impatient! Unfortunately, for investors, Zimbabwe controls world reserves of minerals which are in demand in the car sector in both emerging and developed countries.

• Efforts to get lines of credit from friendly countries should also be exploited.

From this analysis, one can see that Zanu- PF will cause a real shock to the economy mainly from the indigenisation and empowerment drive!

However, as we all know, the Nigerian dish will not be down in a few minutes! It is likely to take us a good roughly six months to see real outcome of the “dish”. This is particularly so because of the timing of elections. The fact that we are now towards the last quarter of the year, there is always a slowdown of the economy due to reduced foreign exchange as most exports are receding since companies are now bracing for the festive season.

So, we better know this so that we don’t doubt this prophesy!

 Gift Mugano is an author and expert in international trade and development and a PhD candidate (Economics) and a lecturer of International Trade and Finance at Nelson Mandela Metropolitan University. He is based in Port Elizabeth, South Africa. Email: [email protected], Mobile: +27 780 174 112.