ZIM­BABWE

Open for busi­ness… and now pol­i­tics Pres­i­dent Em­mer­son Mnan­gagwa and his eco­nomic team sat down for a round-table in­ter­view with The Africa Re­port

The Africa Report - - CONTENTS - By Pa­trick Smith and Ni­cholas Nor­brook in Abidjan

For the first time, Pres­i­dent Em­mer­son Mnan­gagwa and his eco­nomic team took part in a round­table in­ter­view with The Africa Re­port, cov­er­ing elec­tions, in­ter­na­tional diplo­macy, truth and rec­on­cil­i­a­tion, and the fi­nan­cial agenda

Hel­ter-skel­ter rounds of busi­ness deals, diplo­macy and po­lit­i­cal glad­hand­ing have been tak­ing their toll on Team Mnan­gagwa since last Novem­ber. When Pres­i­dent Emer­son Mnan­gagwa ar­rived in Abidjan for the Africa CEO Fo­rum with his busi­ness and min­is­te­rial del­e­ga­tion , they had flown in var­i­ously from Europe, China, In­dia, Rus­sia, and the United States. Af­ter the Fo­rum, Mnana­gagwa flew back to Zim­babwe, paus­ing briefly to com­mis­sion a power sta­tion, and then on to Beijing and a sum­mit with Pres­i­dent Xi Jin­ping. In dol­lar terms Mnan­gagwa’s ef­forts are pay­ing off. Of the more than $7bn of di­rect new in­vest­ment in Zim­babwe, some $4bn is ear­marked for a new plat­inum mine. Other com­mit­ments tar­get gold and di­a­mond min­ing. Af­ter four months on the case, Mnan­gagwa set out Zim­babwe’s roadmap to The Africa Re­port: “First and fore­most, we must make sure that Zim­babwe shall never have food in­se­cu­rity again. We have de­vel­oped the model of agri­cul­ture that guar­an­tees food se­cu­rity in Zim­babwe. Sec­ondly, we must re­sus­ci­tate in­dus­try and com­merce. To do so we need to em­brace the in­ter­na­tional com­mu­nity so they sup­port us.” At the heart of this is the ‘Com­mand Agri­cul­ture’ pol­icy. This is not, Mnan­gagwa in­sists, a form of deep-state eco­nomic con­scrip­tion, but rather a gov­ern­ment-co­or­di­nated re­sponse to the needs of the cash-strapped small farm­ers for seeds, fer­tilis­ers and mar­ket ac­cess. “We need two mil­lion tonnes of grain. [Around] 1.5 of that is con­sump­tion for the year; 500,000 tonnes is strate­gic re­serve for the year. We need 400,000 hectares of land to pro­duce the two mil­lion tonnes of grain. But at the end of the day, we have some­thing like 1.6 mil­lion hectares of land un­der plough.” Mnan­gagwa, him­self a sub­stan­tial farmer, says the gov­ern­ment will su­per­vise and fi­nance grain pro­duc­tion only on the crit­i­cal 400,000 hectares.

The main po­lit­i­cal test will come in July, when Mnan­gagwa has promised that the Zim­babwe Elec­toral Com­mis­sion (ZEC) will hold na­tional elec­tions. For the first time since 2002 – when the Com­mon­wealth ob­servers sharply crit­i­cised the po­lit­i­cal process – the gov­ern­ment has in­vited the United States, the Euro­pean Union, Aus­tralia and the Com­mon­wealth to mon­i­tor the elec­tions.

WOO­ING THE SEN­A­TORS

Al­most as ea­gerly as he pro­nounces Zim­babwe open for busi­ness, Mnan­gagwa has been promis­ing clean and non-vi­o­lent elec­tions this year. What­ever his own com­mit­ments to the rul­ing Zim­babwe African Na­tional Union-pa­tri­otic Front, he knows that should the elec­tions fail the in­ter­na­tional health test, then the next round of re­ally big in­vestors will stay away. And there would be no end to the gov­ern­ment's fi­nan­cial ar­rears log­jam with the World Bank and the African De­vel­op­ment Bank. An im­por­tant piece of the puz­zle is the US gov­ern­ment and its Zim­babwe Democ­racy and Eco­nomic Re­cov­ery Act (ZDERA), which rules out of­fi­cial sup­port for Harare un­less cer­tain po­lit­i­cal con­di­tions are met. Washington is more scep­ti­cal than its Euro­pean coun­ter­parts about Mnan­gagwa's re­form pledges. Sen­a­tors Jeff Flake and Chris Coons pushed through an amend­ment to the ZDERA set­ting out very spe­cific con­di­tions for the lift­ing of the US veto on fresh loans and aid for the Zim­babwe gov­ern­ment. It was par­tic­u­larly crit­i­cal of any mil­i­tary in­volve­ment in the elec­tions. Mna­gagwa's re­sponse was to in­vite Se­na­tor Flake and other crit­ics to Harare to meet his of­fi­cials, the ZEC, op­po­si­tion par­ties and lo­cal hu­man rights groups. He pushed back hard on the mat­ter of the mil­i­tary's role in the election. “They talk about there are mil­i­tary peo­ple in ZEC. If a per­son joins the army at the age of 18 but at the age of 28 he re­signs – per­haps he's be­com­ing an ac­coun­tant or a med­i­cal doc­tor and he joins a paras­tatal – he is not counted as mil­i­tary,” ar­gues Mnan­gagwa. “If you are go­ing to say any­body who has a mil­i­tary back­ground can­not be seen in a democ­racy, then that is not a coun­try. In that case I will be chucked out be­cause my back­ground is mil­i­tary.” Af­ter their meet­ings with Mnan­gagwa and op­po­si­tion politi­cians in early April, Sen­a­tors Flake and Coons ap­peared more up­beat, and more will­ing to fall into line with the as­sess­ments of other or­gan­i­sa­tions such as the African Union, the EU and the South­ern African De­vel­op­ment Com­mu­nity. Flake kept his op­tions open when speak­ing to the press : “Noth­ing will please us more than to rec­om­mend to the Pres­i­dent that these sanc­tions are all to be lifted, and the US and Zim­babwe can have full diplo­matic re­la­tions and re­move in­di­vid­u­als from that sanc­tions list, but that de­pends, as we all know, on what hap­pens in the up­com­ing months." At the CEO Fo­rum, Mnan­gagwa, to­gether with fi­nance min­is­ter Pa­trick Chi­na­masa, re­serve bank gov­er­nor John Man­gudya and agri­cul­ture min­is­ter Per­ence Shiri, sat down with The Africa Re­port for a round-table in­ter­view. TAR: Are you sur­prised by the sup­port for your gov­ern­ment, es­pe­cially from coun­tries that had im­posed sanc­tions on your pre­de­ces­sor’s regime? EM­MER­SON MNAN­GAGWA: In pol­i­tics, there are no per­ma­nent en­e­mies, only per­ma­nent in­ter­ests. Many coun­tries in the past did not have good re­la­tions with us. We are hap­pily sur­prised that they're em­brac­ing us, so we are em­brac­ing them. [With] those coun­tries that stood with us dur­ing the hard 18 years, we are con­sol­i­dat­ing our re­la­tion­ships. But we in­form them that we need new friends. Zim­babwe, as small as we are, can­not be­long to the West nor be­long to the East.

How­ever, China is one of Zim­babwe’s strong­est al­lies? That is cor­rect. Of old friends who stood by Zim­babwe dur­ing the hard times, China is one. I'm a

Zim­babwe, as small as we are, can­not be­long to the West nor be­long to the East

grad­u­ate of their mil­i­tary acad­emy. Since my in­au­gu­ra­tion, I paid vis­its to my peers in the South­ern African De­vel­op­ment Com­mu­nity (SADC) and then on the African con­ti­nent. But the first visit out­side Africa is to China – that is sig­nif­i­cant.

Why are you hold­ing elec­tions this year? Why didn’t you form a gov­ern­ment of na­tional unity to ad­dress the eco­nomic cri­sis first? There was only change in one po­lit­i­cal party, the rul­ing party. Noth­ing else has changed. I am com­plet­ing the man­date of that party, which ends about the 21st or 22nd of July this year. This is when we are go­ing to have our elec­tions. This time I have opened these elec­tions to in­ter­na­tional ob­servers. In the past, we used to have ob­servers from SADC and the con­ti­nent, the African Union and a few se­lected coun­tries. But we have said now we don’t need any vi­o­lence, and I would like all po­lit­i­cal par­ties in Zim­babwe who would like to par­tic­i­pate in these elec­tions to com­mit them­selves to non­vi­o­lence. So we have opened up for the United Na­tions. They can come, the EU can come. And how have in­vestors re­sponded to the new dispensation? Dur­ing past decades, the max­i­mum for­eign di­rect in­vest­ment was $400-$600m per year. But in the last three months, it was over $7bn in com­mit­ted in­vest­ment. For those who are brave and want to make money, this is the time. We want to catch up with our col­leagues in the re­gion in terms of in­fra­struc­ture. Our roads must talk to the roads of South Africa, the roads of Botswana, roads of Zam­bia and so on. Our rail­way sys­tem must do the same. We must mod­ernise and refurbish all this in­fra­struc­ture.

The land is­sue has dom­i­nated Zim­babwe’s pol­i­tics. Can your gov­ern­ment re­solve it? In the 15-year bit­ter war which we fought, [land] was the ma­jor griev­ance. The way our fore­fa­thers lost their land to the colo­nial set­tlers from Bri­tain. Af­ter the Lan­caster House agree­ment, we were given 10 years not to change any­thing, and we com­plied with that. […] I was made min­is­ter of jus­tice, so I be­gin craft­ing leg­is­la­tion to ac­quire land with­out com­pen­sa­tion. That did not please the Bri­tish. Then the sanc­tions were brought on us. But we felt it was nec­es­sary to cor­rect that land im­bal­ance – take the land, give it to the right­ful own­ers.

Are you say­ing that you have suc­ceeded po­lit­i­cally in giv­ing land back to the peo­ple? The peo­ple be­came happy. The land and the peo­ple united. In that process, pro­duc­tion went down dras­ti­cally. But we felt that it was more im­por­tant to con­trol our land rather than keep our land in for­eign hands. To­day, in grain and in cot­ton, pro­duc­tion lev­els have ex­ceeded what was be­ing pro­duced dur­ing the Ian Smith regime. Which means now our task, es­pe­cially un­der my ad­min­is­tra­tion, is to make land pro­duc­tive, mod­ernise agri­cul­ture, in­vite in­vestors at the pro­duc­tion level.

How are you boost­ing pro­duc­tion lev­els now? PA­TRICK CHI­NA­MASA: The tobacco in­dus­try is now dom­i­nated by small-scale farm­ers. The small-scale farm­ers’ pro­duc­tion is now more than what used to be pro­duced by the com­mer­cial farm­ers. What has sus­tained them is fi­nanc­ing through con­tract farm­ing. Through the Re­serve Bank there’s now a fa­cil­ity to as­sist the small-scale farm­ers to grow their tobacco through drip ir­ri­ga­tion. That project is go­ing very well.

How does the lack of a na­tional cur­rency limit your eco­nomic strat­egy? Will you re­store the Zim­babwe dol­lar? The big­gest chal­lenge we face is that we don’t have a cur­rency of our own. We have no in­stru­ment of growth be­cause we don’t print US dol­lars. That also leads to short­ages. We are ac­cel­er­at­ing all the re­forms that are nec­es­sary to get us to a point where we have our own cur­rency. This in­cludes hav­ing to ad­dress the fis­cal deficit. Out of ev­ery $100 of rev­enue we col­lect, 90% of it goes to wages. That is a struc­tural weak­ness in our bud­get. We are also ad­dress­ing is­sues to do with low pro­duc­tion across all sec­tors and ac­cess­ing cap­i­tal on the in­ter­na­tional mar­kets and build­ing re­serves. We are ac­cel­er­at­ing re­forms – in­clud­ing state en­ter­prise re­forms – and [ad­dress­ing] is­sues about the ease and cost of do­ing busi­ness. So as a re­sult of all of these re­forms, there is the nor­mal­i­sa­tion of po­lit­i­cal re­la­tions. When all these pro­cesses which we are do­ing in par­al­lel are achieved, we hope to be in a po­si­tion where we can have our own cur­rency. Then we can be treated like any other coun­try.

Should Zim­babwe join the South African rand zone? JOHN MAN­GUDYA: If you look at the struc­ture of Zim­babwe’s im­ports, most are in US dol­lars. Fuel, that takes the bulk of for­eign cur­rency. Elec­tric­ity comes from South Africa, but we pay US dol­lars. So it doesn’t make any busi­ness sense [to join the rand zone]. What makes sense is to en­sure that we im­prove pro­duc­tiv­ity in Zim­babwe. Be­cause of the use of mul­ti­ple cur­ren­cies, Zim­babwe has be­come very un­com­pet­i­tive. We can­not de­value. This is why we have in­tro­duced in Zim­babwe the ex­port in­cen­tive scheme. Why have an ex­port in­cen­tive scheme? It is to pro­vide a dis­count to those com­pa­nies ex­port­ing. The prob­lem which we are fac­ing now is that the de­mand for for­eign ex­change has gone up so much be­cause the econ­omy is ex­pand­ing. We’ve dol­larised, but we have no ac­cess to long-term for­eign fi­nance.

What is your strat­egy to man­age your debt and re­join in­ter­na­tional fi­nan­cial in­sti­tu­tions? P.C.: We cleared our ar­rears to the In­ter­na­tional Mone­tary Fund, and the rule is that we must ad­dress our in­debt­ed­ness to the Paris Club cred­i­tors and bi­lat­eral cred­i­tors. We are in the process of mo­bil­is­ing re­sources to clear ar­rears to the World Bank and to the African De­vel­op­ment Bank (AFDB). In our con­ver­sa­tion with the World Bank – the ar­rears come to $1.2bn – we have been say­ing we have ex­pec­ta­tions that when we clear the ar­rears, we should get new money into the econ­omy. Since Jan­uary, the World Bank and the AFDB are un­der­tak­ing an ex­er­cise to de­ter­mine our needs across all sec­tors. That will in­form what new money they can con­sider pump­ing in to re­sus­ci­tate and re­vive our econ­omy.

So how are you fi­nanc­ing the gov­ern­ment? You’re spend­ing all this money on salaries. You have a health ser­vice that needs medicine. What you need to ap­pre­ci­ate about Zim­babwe is that a lot of the wealth is now be­ing cre­ated in the in­for­mal sec­tor. But as the in­for­mal sec­tor in­ter­sects with the for­mal sec­tor, that’s how we get our rev­enue to sus­tain our oper­a­tions. But in terms of cap­i­tal de­vel­op­ment and in­fra­struc­ture, much of it has been through loan fi­nanc­ing. His ex­cel­lency [Pres­i­dent Mnan­gagwa] will be com­mis­sion­ing a 300MW power sta­tion just com­pleted by a Chi­nese con­trac­tor through loan fi­nanc­ing from China Exim Bank.

When will you re­lease a roadmap for the elec­tions? How much more work needs to be done on voter regis­tra­tion, and will the regis­ter be pub­licly avail­able? E.M.: We have in­tro­duced bio­met­ric voter regis­tra­tion. [...] There was an out­reach pro­gramme which ended on 12 Jan­uary and we ex­tended it again for an­other two months, which ended in March. So now they are up­load­ing and pre­par­ing the vot­ers’ rolls. When that is done and is pub­lished, this is when I must make a procla­ma­tion of the gen­eral elec­tions. How are you get­ting on with the op­po­si­tion these days? I was pleas­antly sur­prised when al­most all the op­po­si­tion lead­ers at­tended my in­au­gu­ra­tion. I felt very good, and there was such chem­istry with us. […] In any democ­racy, in a fam­ily, in a na­tion, you don’t al­ways agree. This is how democ­racy is – the best ar­gu­ment should win the day. I ac­cept the op­po­si­tion; I have no prob­lem with them. In fact, the more they in­ter­ro­gate and make con­struc­tive crit­i­cism of our ad­min­is­tra­tion, [the more] I like it be­cause I cor­rect my­self and I con­tinue rul­ing.

You have asked par­ties to com­mit to non­vi­o­lence. Do you in­tend to es­tab­lish a South African-style truth and rec­on­cil­i­a­tion com­mis­sion? Our new con­sti­tu­tion pro­vides for the cre­ation of the na­tional heal­ing com­mis­sion. We’ve cre­ated it. So they must go and lis­ten to the griev­ances of the peo­ple across the board. They’ve just be­gun. I will not de­ter­mine what re­port they are go­ing to bring back. They are hold­ing public hear­ings cov­ered by the press. It’s the cre­ation of an en­vi­ron­ment of trans­parency, open­ness, brother­hood, sis­ter­hood, love and unity among our­selves. We must con­tinue talk­ing to each other. We mustn’t say ‘them’ and ‘us’. We must al­ways be us to­gether. That’s the phi­los­o­phy we want to put across […]. We don’t need in­sti­tu­tions forc­ing peo­ple to love each other. It must be through di­a­logue and con­ver­sa­tions with all groups. I give ser­vant lead­er­ship to the coun­try. I must be a lis­ten­ing pres­i­dent, and it’s work­ing very well in our sit­u­a­tion.

Pa­trick Chi­na­masa, Em­mer­son Mnan­gagwa, Per­ence Shiri and John Man­gudya, flanked by The Africa Re­port’sNi­cholas Nor­book (left) and edi­tor Pa­trick Smith (right)

Top: Harare hopes to sus­tain its mood of op­ti­mism Above: Small-scale tobacco farm­ers are the back­bone of the econ­omy

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