Mnangagwa faces sterner test as economy implodes
EMBATTLED President Emmerson Mnangagwa is facing his sternest economic test since assuming power in 2017 as the crash of the Zimbabwean dollar pushes up prices, amid growing disenchantment with his leadership.
Mnangagwa, propelled to office by a military coup, promised substantial political and economic reforms, but has failed to decisively tackle corruption and address a confidence crisis that has been worsened by strong headwinds, including a crippling liquidity crunch, acute fuel and foreign currency shortages, low capacity utilisation and runaway inflation, which have decimated incomes and pensions.
Sources in the security sector revealed that government is in panic mode, fearing civil unrest as the economy deteriorates and extreme poverty deepens.
Mnangagwa’s spokesperson George Charamba, revealed on Twitter that Covid-19 was not the only reason police had tightened security on roads leading into the central business districts of major cities. He said they were thwarting “planned mischief” — in reference to anti-government protests.
This week, central Bulawayo resembled a ghost town after thousands of commuters and motorists were forced to return home despite having the necessary documentation to venture into the city centre.
On the political front, the septuagenarian leader is facing growing criticism over human rights abuses and high levels of corruption which have caused disquiet even among his own party members, according to insiders.
The takeover of opposition MDC-Alliance headquarters in Harare by the Thokozani Khupe-led MDC-T using the security forces has triggered global censure.
This has been worsened by the alleged abduction and torture of the three MDCAlliance youth leaders Joana Mamombe, Cecilia Chimbiri and Netsai Marova last month.
However, they have since been arrested over charges of faking the abduction and torture. The brutality has drawn criticism from the United Nations.
“The charges against the three women should be dropped. Targeting peaceful dissidents, including youth leaders, in direct retaliation for the exercise of their freedom of association, peaceful assembly and freedom of expression is a serious violation of human rights law,” United Nations human rights experts said in a statement.
Foreign Affairs minister Sibusiso Moyo held a virtual meeting with British minister for Africa James Duddridge recently.
After the meeting, Duddridge revealed on Twitter that he had communicated to the Zimbabwean minister British concern over human rights violations. The European Union and the United States have also condemned the human rights abuses. This has effectively derailed Mnangagwa’s international re-engagement plan.
To compound his woes, high-level corruption implicating the First Family and their associates has been exposed by journalists in the procurement of Zupco buses and Covid-19 test kits and masks.
As the crackdown on the opposition continues, government arrested lawyers, including opposition leader Nelson Chamisa’s attorney Thabani Mpofu, while Zanu PF’s acting spokesperson Patrick Chinamasa threatened journalists for exposing the first family’s association with Drax International frontman Delish Nguwaya, who was awarded a US$60 million tender to supply drugs and Covid-19 material without going to tender and at grossly inflated prices.
After widespread outrage, both locally and internationally, Mnangagwa ordered the cancellation of the tenders. Nguwaya has since been arrested, with the Zimbabwe Anti-Corruption Commission currently investigating the matter.
Even in Mnangagwa’s own party, disgruntlement over corruption has exploded into the public arena, with Zanu PF youth league members Godfrey Tsenengamu and Lewis Matutu accusing tycoons close to the President of contributing to economic collapse. This eventually led to the axing of Tsenengamu from the party and the suspension of Matutu.
“But the proliferation of corruption in recent weeks involving the First Family and the President’s associates has angered many in Zanu PF and the security sector. What’s happening is a shame and things should not and cannot continue like this,” a securocrat told the Zimbabwe Independent.
Last week, expelled Zanu PF member of the National Assembly for Chivi South, Killer Zivhu, claims that his attempts to expose corruption in the party were behind his dismissal.
Mnangagwa is not faring any better on the economic front as his government’s decision to reintroduce the Zimbabwean dollar as the sole legal tender in June last year while abandoning the multi-currency regime in operation since 2009 has backfired spectacularly.
The local unit has weakened considerably against the greenback with the exchange rate, hovering around US$1:ZW$80. This has severely eroded pensions and incomes, with basic commodity prices skyrocketing.
A loaf of bread now costs ZW$61, while a two-litre bottle of cooking oil has shot up to more than ZW$200 with a 2kg packet of rice going up to nearly ZW$200. The depreciation of the local currency is underlined by the inadequacy of the two highest-denomination bank notes, namely the ZW$10 and ZW$20, to purchase a loaf of bread combined.
The Consumer Price Index has breached the 1 000% mark with year-on-year inflation galloping to 785,55%. This has led to labour unions demanding that employers ditch the weakening Zimdollar as a form of payment and instead pay wages in forex. Civil servants have become restive as evidenced by nurses staging protests on Wednesday and Thursday.
The government announced a 50% increase in Zimdollar salaries as well as a Covid-19 allowance of US$75 for its workers and US$30 for pensioners. However, the revelation that they will not receive the money in hard cash but electronically has swept away the excitement created by the government’s salary announcement. This is an indication of the pressure Mnangagwa's government is under as it has previously dismissed the idea of paying civil servants in forex.
Addressing party members at last week's politburo meeting in combative style, Mnangagwa blamed political detractors, malcontents and “elite opportunists” who are pushing a nefarious agenda for the rout of the local currency. Two days later, announcing measures to relax lockdown measures put in place to contain the Covid-19 pandemic, Mnangagwa conceded that the economy was in terrible shape without taking any of the blame for the accelerated decline of the economy.
Finance minister Mthuli Ncube told international financial institutions (IFIs) in April this year about the parlous state of government finances. In the leaked letter, Ncube warned that without assistance from IFIs the country would implode, with regional ramifications, adding that the economy will contract by between 15% and 20% this year worsened by the coronavirus pandemic.
The economic implosion is serious cause for concern within Zanu PF as evidenced by the party’s politburo summoning Ncube and Reserve Bank governor John Mangudya to explain what measures they are taking to reverse the economic decline which they fear will lead to embarrassment in the 2013 general elections.
Economist John Robertson said the government needs to create conditions suitable for production if the country’s economy is to recover.
“If we don’t produce enough and create the conditions necessary to produce, we will carry on importing,” Robertson warned.
“The damage that has been done to the productive sector has been huge and will take years for the country to recover. The government has however not started that process and, the sooner they begin to do so, the better.”