Zimbabwe’s ruling party secured a landslide win in the first parliamentary election of the post-Robert Mugabe era as the opposition and advocacy groups questioned the credibility of the process.
With almost three-quarters of the legislative results tallied, President Emmerson Mnangagwa’s Zimbabwe African National Union-Patriotic Front won 110 of the 210 directly elected seats in the National Assembly, electoral commission officials said Wednesday. Nelson Chamisa’s opposition Movement for Democratic Change Alliance won 40. Another 60 seats will be allocated to women based on the proportion of the vote their party wins.
After a largely peaceful campaign and vote on Monday, the focus now shifts to the credibility of the process and whether the results are accepted, key pillars needed to rebuild the southern African nation after two decades of decline under Mugabe’s rule. The jury is still out on whether the contest was fair, with observers noting a number of flaws and the opposition alleging there’d been a deliberate attempt to frustrate and suppress urban voters.
Crisis in Zimbabwe Coalition, the country’s largest group of non-governmental organizations, said the July 30 election “falls short of a credible process.” It cited concerns that the voters’ roll hadn’t been released prior to the poll, about a fifth of results from the presidential ballot weren’t published outside polling stations and that some voters had been “deliberately displaced.”
The MDC also questioned the pace of releasing tallies from the presidential vote. The ruling party’s margin of victory in legislative elections makes Mnangagwa, 75, the favorite in that race, which featured 22 candidates. The outcome will be announced once the counts from all provinces are received and verified, Priscilla Chigumba, the chairwoman of the electoral commission, told reporters. Final results must be released by Aug. 4.
The ZEC “seeks to release results to buy time and reverse the people’s presidential election victory,” Chamisa said on his Twitter account. “The strategy is meant to prepare Zimbabwe mentally to accept fake presidential results.”
All you need to know about Zimbabwe’s elections.
Chamisa, a lawyer and pastor who took control of the MDC after the death of its founding leader Morgan Tsvangirai in February, said on Tuesday that based on his party’s own count of unofficial results from more than 90 percent of the 10,985 polling stations, the MDC was “winning resoundingly” and ready to form the next government.
Home Affairs Minister Obert Mpofu accused individuals and parties of inciting violence by declaring themselves winners before the results were announced.
An observer group from the Southern African Development Community, a regional group, said in preliminary findings that the campaign and vote were generally peaceful and in line with the law, describing it as “a watershed” in the country’s history. Observers from the African Union found that the election was by and large well administered despite some logistical challenges, and the electoral commission was well prepared.
European Union and American observer groups are due to deliver their assessments of the vote later on Wednesday.
The ruling party forced Mugabe to resign in November, when the military briefly seized control of the country, and replaced him with Mnangagwa, his former deputy and spy chief. Whoever wins the vote will have to administer a broke Treasury that’s unable to service its loans or take out new ones, leaving little scope to improve government services, rebuild crumbling transport links and meet a plethora of other election pledges.
“The ability for the new government to kick-start the economy will in a large part depend on to what extent it can mobilize external support for whatever reform program they will embark on,” said Mark Bohlund, an Africa economist at Bloomberg Economics. “There is arguably a strong desire to help Zimbabwe pave its way out the economic disaster of the last decades, but also an understandable suspicion of the real intent of the political and economic elite to change their ways.”
President Emmerson Mnangagwa on Saturday assured Zimbabwe's white farmers that their land will not be taken, calling on them to work together with the government ahead of landmark elections on July 30.
Under his predecessor Robert Mugabe, white farmers were evicted in favour of landless black people from 2000 by a controversial policy that wrecked agriculture and triggered an economic collapse.
But less than two weeks to go before Zimbabwe's first elections since Mugabe's ouster, Mnangagwa moved to quash any fears the practice would be repeated.
"This issue of new (land) invasions is a thing of the past. The rule of law must now apply," Mnangagwa told a group of about 200 white and Asian people gathered in the capital Harare, adding that the "animal farm mentality," was a thing of the past.
"I am saying we should cease to talk about who owns the farm in terms of colour. It is criminal talking about that. A farmer, black farmer, a white farmer is a Zimbabwean farmer."
Mnangagwa said his government was "racially blind" and needed the expertise of everyone across the economy.
Zimbabwe's white population has fallen to less than one percent of the country's 16 million after Mugabe imposed the policy to expropriate farms in 2000.
Agricultural output crashed in the aftermath, with investors leaving and mass unemployment forcing millions of Zimbabweans out of the country to seek work.
- 'A lot of encouragement' -
Mnangagwa acknowledged the failure of the land reforms, saying the expertise of white people in the farming sector was still needed and encouraging them to take part in rebuilding Zimbabwe.
"We must build the Zimbabwe we want. We want to restore the status of Zimbabwe as a food basket of the region," he said.
"He gave us a lot of encouragement. We came here to ask for options for farming," Louisa Horsely, 51, told AFP.
"I wanted to know if my husband's expertise is still needed if he wants to farm and wants to help other people to farm and that is what we are interested in. It sounds (like) he wants us to be part of it."
Tara Chatterton, 39, who runs an auctioning business, said she attended the rally to hear what Mnangagwa's plans were since the military intervention last year that resulted in the removal of Robert Mugabe after nearly four decades.
"We are here just to see... what he is aiming at in trying to bring the country back up and trying to get people to work together as one nation," Chatterton said.
Paul Sexton, 71, who works for a printing company, said he was impressed that the leader "didn't make any outlandish promises".
"It's going to take time and that's the truth."
Zimbabwean President Emmerson Mnangagwa is putting money his government doesn’t have on the line to increase its 350,000 workers’ salaries as the country gears up for next month’s elections.
Mnangagwa has pledged that the July 30 elections, the first since Robert Mugabe was forced to step down in November after almost 40 years in power, will be free of the rigging and violence that marred previous votes. His ruling party’s chances of victory should get a lift from his promise to grant 15 pay rises to civil servants, who swallow up 90 percent of the government’s budget, and improve benefits for war veterans who fought white-minority rule.
“With the elections imminent and government workers a euphemism for party loyalists, the timing of the public sector wage hike proposals appear to be politically motivated,” Hasnain Malik, the Dubai-based head of equities research at Exotix Capital, said by email. “This is not an increase that the government can afford.”
Besides raising questions about the election’s credibility, the spending spree will hamper efforts to rebuild an economy shattered by a failed land reform program, hyperinflation and mass emigration. Mnangagwa, 75, is facing a challenge from Nelson Chamisa, 40, leader of the main opposition Movement for Democratic Change, in the presidential race.
The opposition has promised to scrap bond notes, introduced in 2016 as a form of currency, and compensate former white farmers who lost their land if it’s elected to rule. The MDC also said on Thursday its longer-term goal would be to join the rand monetary union and the Southern African Customs Union.
Zimbabwe’s wage bill equates to just under 20 percent of gross domestic product. Finance Minister Patrick Chinamasa, who was repeatedly overruled by Mugabe when he sought to curb bonuses and pay hikes aimed at bolstering dwindling government support, appears to be facing the same situation under Mnangagwa. While he cautioned at a conference in Harare last month that the pay increases will make the government’s already shaky finances even worse, his warnings have gone unheeded.
Containing the wage bill will require the government to drastically cut staff numbers, which wouldn’t be affordable under current labor laws, and they will have to be changed, according to John Robertson, a Harare-based independent economist. In the meantime, he expects spiraling labor costs to be a further drag on an economy that’s halved in size since 2000.
“We are already uncompetitive, so higher wages will make exports impossible,” Robertson said by phone from Harare.
Even without the latest salary increases, the government has been struggling to pay its workers on time as it contends with chronic cash shortages. Zimbabwe abandoned its own currency in 2009 to end hyperinflation, and has used mainly U.S. dollars.
While Zimbabwe has paid $110 million of arrears to the IMF, it’s still saddled with $1.7 billion in arrears owed to the African Development Bank and World Bank that it needs to clear before it can tap new loans from multilateral lenders. Zimbabwe’s total debt is expected to reach $14.5 billion this year, the Finance Ministry said in the budget.
Given that a credible commitment to fiscal deficit reduction is a key part of securing new funding, the proposal for big salary increases “is a negative development, taken in isolation,” Malik said
Zimbabwe will hold a general election on July 30, President Emmerson Mnangagwa said, a vote he has pledged will be free and fair with international monitoring after the ouster of 94-year-old strongman Robert Mugabe.
Mnangagwa, who took power after the November military coup against Mugabe, counts on the election to bolster his legitimacy as he pursues a promised break with Mugabe’s repressive policies while urging foreign investors to return to Zimbabwe. Missing from the July ballot for the first time in 20 years will be Zimbabwe’s foremost political gladiators, Mugabe and Morgan Tsvangirai, the longtime opposition Movement for Democratic Change (MDC) leader who died of cancer in February.
Mnangagwa has invited the Commonwealth to monitor voting in Zimbabwe for the first time since 2002 when Harare was suspended from the group over accusations of rigged elections. He has applied for Zimbabwe to rejoin the Commonwealth. Should the election be certified by international monitors, it could be a key step to a resumption of financial aid by foreign lenders for the first time in two decades.
The vote is being cast as a fight between the old guard of Zimbabwe’s 1970s independence war and a younger generation. Mnangagwa’s main challenger is 40-year-old Nelson Chamisa from the MDC, who has energised the party, drawing huge crowds at rallies in some of the ruling ZANU-PF party’s rural redoubts.
Sixty percent of the 5.4 million voters on the new register are under 50 years old, according to official data. Separately, the Constitutional Court dismissed an application by Zimbabweans living abroad to be allowed to vote. The court did not immediately give a reason.
In a brief statement in an official government gazette, Mnangagwa said that he had fixed July 30 “as the day of the election of the president, the election of members of the national assembly and election of councillors.”
Prospective candidates will be registered on June 14. A presidential run-off vote is set for Sept. 8 if no candidate gets the 50-plus-one percent mark required to win.
For the 75-year-old Mnangagwa, victory would accord him democratic legitimacy after taking power following the coup. Nicknamed “Crocodile” for his secretive and insular demeanour, Mnangagwa goes into the election with the advantage of incumbency, allowing him access to state resources for his campaign.
Crucially, Mnangagwa enjoys the backing of the army, which analysts say remains averse to a leader lacking a pedigree from the independence war against Britain. “Though the election looks like it will go to the wire, the greater likelihood, based on cold-blooded analysis, is that experience, depth and state incumbency will triumph over youthfulness,” said Eldred Masunungure, a professor of political science at the University of Zimbabwe.
Critics say Mnangagwa was Mugabe’s most loyal acolyte and blame him for a government crackdown on rebels loyal to political rival Joshua Nkomo in the mid-1980s that rights groups say killed 20,000 civilians.
Mnangagwa has denied the charges and says political freedoms have improved under his short tenure and that he is repairing frosty relations with the West.
On Friday, May 18, 2018, President Emmerson Mnangagwa said Zimbabwe had received a loan from the United Kingdom, which would go towards easing the country’s cash shortages.
“For the first time after nearly 20 years, we have received a soft loan, from the British, of $100 million and the (RBZ) governor has been telling me how he has disbursed the money and as from yesterday almost every single bank in the country had received part of the $100 million received,” The Herald quoted the president as having said.
Mnangagwa was to repeat the claim at a political rally in Mutare on Saturday.
Speaking in Shona, Mnangagwa was quoted by The Sunday Mail saying:
“We now have good relations with Britain, this week, on Tuesday, they gave us $100 million to help us resolve the cash crisis in the country.”
DETAILS OF THE BRITISH LOAN:
On Thursday, May 17, 2018, the Commonwealth Development Corporation (CDC), announced it would partner Standard Chartered Bank in extending an investment facility of up to $100 million to private Zimbabwean businesses seeking capital to grow.
The CDC is the UK’s development finance arm, while Standard Chartered is a leading British bank, whose Zimbabwean unit is the oldest in the southern African country.
The five-year facility will see CDC and Standard Chartered share the default risk on up to US$100 million of new loans originated by Standard Chartered Bank Zimbabwe in the southern African state.
The investment will be used for capital expenditure and for helping businesses meet their day-to-day financing needs. The likely recipients will include firms in the food processing, manufacturing and agriculture sectors.
In an interview with the Financial Times, CDC chief executive Nick O’Donohoe stressed that the funding would not be to Zimbabwe’s government, but private firms.
While the loan will improve Zimbabwean businesses’ access to foreign currency, improve local production and reduce pressure on the country’s current account in the long term, it is incorrect to say, as Mnangagwa claimed, that the British have given Zimbabwe funds to ease its cash crisis.
While the president claimed the funds had already been disbursed to Zimbabwe, the Financial Times, which broke the story, reported that CDC and Standard Chartered Bank were in the process of drawing up a list of private firms to benefit from the facility.
The president’s statement created the impression that the $100 million loan was being directly injected into circulation in Zimbabwe, which is not the case.
Zimbabwean President Emmerson Mnangagwa said Saturday that he will proclaim the 2018 election date at the end of May.
Addressing a rally in Mutare, Manicaland province marking the start of the ruling ZANU-PF election campaign, the president said the party will intensify its campaigning once the election date is proclaimed.
According to the country's constitution, the elections must be held between July 21 and August 21. Zimbabwe's parliament last week passed the Electoral Amendment Bill which now awaits presidential assent to become law.
The bill seeks to give legal effect to the bio-metric voter registration system that was done by the national electoral body for the first time. As political parties gear up for the polls, ZANU-PF has finished selecting its candidates while the main opposition party the MDC Alliance is still to conclude candidate selection.
President Mnangagwa, who took over from former president Robert Mugabe in November last year, will fight it out with the youthful leader of MDC Alliance Nelson Chamisa in the presidential poll. As the nation edges towards the polls, voters' roll inspection opened on May 19 and will run until May 29.
About 5.4 million people in Zimbabwe are registered to vote in the elections.
President Emmerson Dambudzo Mnangagwa, who has positioned himself as a pro-business president since his November 2018 inauguration, has indicated that his ascension has coincided with an increase in investor interest in Zimbabwe.
On February 8, 2018, the Herald newspaper quoted Mnangagwa saying: “We have secured more than $3bn in foreign direct investment in just seven weeks. We want this country to move forward. We want jobs for our children. For a start, we are addressing the production levels of agriculture where we are modernising all forms of production. We will move into modernising the processing chain.”
Addressing a church gathering in Shamva on April 25, 2018, Mnangagwa announced that investment commitments to Zimbabwe had increased to $11 billion. The Zimbabwe Broadcasting Corporation (ZBC) quoted the president, who is routinely referred as “ED” by the local media, as saying: “For the past four months, we have been discussing and realised that investment commitments have passed $11 billion as companies are angling themselves for mutual benefit.”
The International Monetary Fund’s Balance of Payments and International Investment Position Manual (BPM6) defines foreign direct investment as international investment by an entity resident in one economy in an enterprise resident in another economy that is made with the objective of obtaining a lasting interest.
The lasting interest implies the existence of a long-term relationship between the direct investor and the enterprise and a significant degree of influence on the management of the enterprise. Direct investment involves both the initial transaction that establishes the relationship between the two entities and all subsequent capital transactions between them and among affiliated enterprises, both incorporated and unincorporated.
According to the IMF, a direct investment enterprise is an incorporated or unincorporated enterprise in which a direct investor that is resident of another economy has 10 percent or more of the ordinary shares or voting power (for an incorporated enterprise) or the equivalent (for an unincorporated enterprise).
The direct investor may be an individual, an incorporated or unincorporated private or public enterprise, a government, or an associated group of individuals or enterprises that has a direct investment enterprise in an economy other than that in which the direct investor resides. The ownership of 10 percent of ordinary shares or voting power is the criterion for determining the existence of a direct investment relationship.
Investment approvals versus commitments
The Zimbabwe Investment Authority (ZIA), the state agency responsible for overseeing and licencing foreign investment into the country, routinely provides information on the value of projects it would have approved. However, ZIA does not provide data on actual investment, within the boundaries of the IMF definition of FDI.
Nevertheless, ZIA’s statistics of projects licenced in the first quarter of 2017 show a wide gap between commitments claimed by Mnangagwa and approved FDI investments. ZIA chief executive Richard Mbaiwa told journalists at the Zimbabwe International Trade Fair that the agency had licenced projects worth about $950 in the first quarter of 2018.
The Herald quotes Mbaiwa saying: “The enquiries that have come to ZIA have increased very significantly. If I look at the first quarter of 2018, comparing to the first quarter of 2017, you see a very significant increase.
“In terms of projects that we have actually licensed, not those that made commitments such as the $4,2 billion by Karo Resources and others and not licensed by ZIA, I am not including those; I mean the ones ZIA has actually licensed, for the first quarter we are standing at just below a billion dollars.
“The figure (for licensed projects) is about $950 million. In the first quarter of 2017 we were at about $150 million. So, you can see the difference, the jump. Normally, the first quarter is the slowest, especially in the previous years. When we had $150 million in the first quarter, by end of the year the figure would have gone up to between $1,5 billion and $2 billion,” he said.
“So we think that this year, with the first quarter just shy of a billion dollars, we are quite positive that by end of the first quarter maybe we would have already surpassed last year’s total figure ($1,2 billion project approvals for whole of 2017).
Expected Direct Investment (EDI) versus actual FDI
Mnangagwa’s presidency has indeed seen a notable increase in foreign investor interest, as shown by several high-profile visits by investors, who include the chief executive of multi-billion dollar British development financier Commonwealth Development Corporation, Nick O’Donohoe, mineral fertilizer mogul Dmtry Mazepin, rated the 61st richest Russian by Forbes in 2015, Sergey Ivanov Jr, the chief executive of the world’s number two diamond miner Alrosa and mining entrepreneur Loucas Pourolis, chairman of the London and Johannesburg-listed Tharisa plc. Pouroulis signed a $4,2 billion deal with the government, to develop a platinum mine and refinery in the country.
In February, a high-level delegation from US multinational conglomerate General Electric visited the country and expressed interest in the 2 400 megawatt Batoka hydropower project, which is estimated to cost $4 billion.
During his April state visit to China, Mnangagwa also met Xiang Guangda, with the president’s aides announcing that Xiang’s Tsingshang Holdings – which lays claim to being China’s second biggest stainless steel manufacturer – was interested in setting up a $4 billion steel plant in Zimbabwe.
Xiang already has interests in Zimbabwe through ferrochrome firm Afrochine Smelting, which was set up in 2012. In 2013, the Chinese firm was reported to be planning to invest in a power plant that would generate as much as 1 000 megawatts to supply its Selous plant, with the surplus power being fed into the national grid. Five years on, it remains unclear if Afrochine is still pursuing the power project.
In an article he wrote for the Sunday Mail, presidential spokesman George Charamba suggested Xiang’s power plant ambitions had been frustrated by the previous administration: “But he (Xiang) has been knocking on Government offices for the past three years, to no avail. Still, he didn’t give up on us.
“In that 30-minute meeting (with Mnangagwa), the investor was able to walk away with concrete commitments on all his requirements, opening the way for an early start to the project.”
Another Chinese billionaire Zhang Li, who is considering investing over $1 billion in the Zimbabwe Iron and Steel Company, also returned, having first come to Zimbabwe in October, 2017, when he was hosted by former President Robert Mugabe.
ZIA statistics of licenced projects, juxtaposed with data from the United Nations Conference on Trade and Development (UNCTAD), reveal a significant variance between FDI approvals and actual investment. The UNCTAD publishes an annual report on global investment, which provides details of FDI trends at the national, regional and global level. The UNCTAD’s World Investment Report is a widely used resource for FDI data.
While ZIA has approved projects worth an average $1 billion annually over the past few years, Zimbabwe’s FDI has averaged $400 million since 2013.
While ZIA data shows an increase in investor interest in Zimbabwe, with $950 million worth of approved projects comparing favourably with the annual average value of approvals in previous years, there is no evidence to back up Mnangagwa’s February claim, made at a Guruve rally, that the country secured more than US$3 billion in FDI in seven weeks as reported by The Herald.
In subsequent pronouncements, Mnangagwa appears to be cautious as he talks about FDI commitments, not secured investment. As the ZIA and UNCTAD statistics show, approved projects and actual FDI investments vary significantly. As such, commitments to invest demonstrate interest but do not paint the whole picture. - Zimfact
- The Source
The African Development Bank is leading talks with Zimbabwe and its creditors to make plans for the nation to pay off some of its arrears so it can restore relations with lenders, said Akinwumi Adesina, the bank’s president.
During almost two decades of economic mismanagement the southern African nation’s debt surged to more than 70 percent of gross domestic product and the economy has halved in size since 2000, according to the government.
“We’re talking with the government and were looking for a way we can all have a common agreement and hopefully reach a mutually acceptable timeline for an arrears clearance,” Adesina said in an interview on Monday in Johannesburg. “The AfDB is spearheading that conversation with all the creditors.”
While Zimbabwe has paid $110 million of arrears to the International Monetary Fund, it’s still saddled with $1.7 billion of arrears to the AfDB and World Bank. The Finance Ministry forecast total debt of $14.5 billion in the 2018 budget.
It needs to clear the arrears so it can once again seek foreign assistance from lenders such as the IMF.
President Emmerson Mnangagwa took power in November when Robert Mugabe resigned as the nation’s leader after the military temporarily took control and effectively ended his 37-year reign. He has pledged to revive the economy and sell bonds to finance infrastructure development.
“With the new government it creates a new opportunity to support the country to unlock its potential and to stabilize,” Adesina said. A new Zimbabwe is great for “political stability and regional trade in the Southern African Development Community area.”
The nation abandoned its own currency in 2009 as runaway inflation rendered it worthless, opting instead for a basket of currencies that includes the dollar, South Africa’s rand, the pound and Botswana’s pula.