Zimbabwe’s President Emmerson Mnangagwa invited opposition leaders to a meeting on Wednesday to draw up terms for a national dialogue, they said, following a brutal crackdown on anti-government protests.
More than 20 politicians who contested July’s presidential election were invited, two of whom - Lovemore Madhuku and Noah Manyika - said they would attend. It would be the first meeting between Mnangagwa and opponents since he took power from Robert Mugabe in November 2017.
Manyika however said he believed conditions were not yet right for meaningful dialogue, which could only happen if hundreds of people detained during the crackdown were released and soldiers withdrawn from streets and checkpoints.
“It can only take place if, as the president promised upon his return from his overseas trip, the heads of those who have been responsible for brutalising citizens roll,” Manyika said.
On Tuesday, a nationwide strike by public sector teachers for better pay got off to a patchy start, as some stayed at home while others attended school but did not teach amid fears of further intimidation.
The president hiked fuel costs by 150 percent last month and immediately travelled abroad, triggering unrest that drew a violent response from security forces and eventually persuaded him to cut short his foreign tour.
On his return home, Mnangagwa promised action against brutality by police and troops and called for a national dialogue. There was no immediate comment on Tuesday’s invitation from Mnangagwa or his spokesman.
Nelson Chamisa, who heads the main opposition Movement for Democratic Change party and who counts Manyika among his allies, could not be reached for comment.
The MDC believes Zimbabwe is reverting to the authoritarian rule that characterised the regime of long-time leader Mugabe, and says the election that confirmed Mnangagwa as president in July was rigged, an allegation the judiciary rejected.
‘REPORT ALL INTIMIDATION’
The southern African nation is mired in an economic crisis marked by soaring inflation and shortages of cash, fuel and medicines. Many government workers are demanding wage rises and payments in dollars to compensate.
On Tuesday the striking Zimbabwe Teachers Association (ZIMTA), the biggest teaching union, said most of its members had stayed at home but that security agents had gone to some schools taking details of absent teachers.
The union accused authorities of spreading fake news to discourage teachers from going on strike after state media reported that the stoppage had been called off. “Report all forms of intimidation, we are building a dossier of such,” ZIMTA said in a notice to members. Cabinet ministers declined to answer questions on the strike at a media briefing in Harare.
In schools around the centre of the capital, most teachers appeared to have turned up for work, but some were not taking lessons, witnesses said. In a classroom at a primary school in Harare’s Mbare township, a Reuters photographer saw one teacher eating from her lunch box in class while pupils sat quietly.
Zimbabwe has more than 100,000 public-sector teachers.
The shortage of U.S. dollars in the country has plunged the financial system into disarray and forced businesses to close.
Zimbabwe will introduce a new currency in the next 12 months, the finance minister said, as a shortage of U.S. dollars has plunged the financial system into disarray and forced businesses to close.
In the past two months, the southern African nation has suffered acute shortages of imported goods, including fuel whose price was increased by 150 percent.
Zimbabwe abandoned its own currency in 2009 after it was wrecked by hyperinflation and adopted the greenback and other currencies, such as sterling and the South African rand.
But there is not enough hard currency in the country to back up the $10 billion of electronic funds trapped in local bank accounts, prompting demands from businesses and civil servants for cash which can be deposited and used to make payments.
Finance Minister Mthuli Ncube told a townhall meeting a new local currency would be introduced in less than 12 months.
“On the issue of raising enough foreign currency to introduce the new currency, we are on our way already, give us months, not years,” he said.
Zimbabwe’s foreign reserves now provide less than two weeks cover for imports, central bank data show. The government has previously said it would only consider launching a new currency if it had at least six months of reserves. Locals are haunted by memories of the Zimbabwean dollar, which became worthless as inflation spiralled to reach 500 billion percent in 2008, the highest rate in the world for a country not at war, wiping out pensions and savings.
A surrogate bond note currency introduced in 2016 to stem dollar shortages has also collapsed in value.
President Emmerson Mnangagwa is under pressure to revive the economy but dollar shortages are undermining efforts to win back foreign investors sidelined under his predecessor Robert Mugabe.
Mnangagwa told reporters that the price of petrol had increased to $3.31 per litre from $1.32 but there would be no increase for foreign embassies and tourists paying in cash U.S. dollars.
Locals can pay via local debit cards, mobile phone payments and a surrogate bond note currency.
With less than $400 million in actual cash in Zimbabwe according to central bank figures, fuel shortages have worsened and companies are struggling to import raw materials and equipment, forcing them to buy greenback notes on the black market at a premium of up to 370 percent.
The Confederation of Zimbabwe Industries has warned some of its members could stop operating at the end of the month due to the dollar crunch. Cooking oil and soap maker Olivine Industries said it had suspended production and put workers on indefinite leave because it owed foreign suppliers $11 million.
A local associate of global brewing giant Anheuser-Busch Inbev said this week it would invest more than $120 million of dividends and fees trapped in Zimbabwe into the central bank’s savings bonds.
When economically challenged rulers try to run nations, especially fragile ones, they can easily make mistakes.
In the past few weeks demonstrators have taken to the streets of Khartoum and Omdurman to protest Sudanese President Omar al-Bashir’s removal of subsidies that have long kept bread and fuel affordable.
Now it’s Zimbabwe’s turn. Just before flying off to Russia last weekend, President Emmerson Mnangagwa doubled the price of petrol. Doing so brought already impoverished urban Zimbabweans out onto the streets of the capital Harare as well as Bulawayo and a dozen other cities and towns. Protesters blocked roads with tyres, trees and rocks, stopped bus transport, attacked the police, threw canisters of tear gas back at security forces and generally ran amok.
Mnangagwa’s excuse for raising prices so abruptly is not clear. Possibly he thinks that more costly petrol will bring more cash into national coffers that are mostly bare. Or perhaps he believes that more petrol will pour into the country via the pipeline from Beira in Mozambique if it is more valuable. Both ideas are barmy.
Before flying off to Russia, Mnangagwa said that the fuel price rise was intended to reduce shortages of fuel that, he indicated, were caused by rises in the use of fuel and what he called “rampant” illegal trading – accusations that make no sense whatsoever. Making petrol purchasing more expensive for poor Zimbabweans – the majority of the nation’s people – simply adds to their hardship and further slows an already crippled economy.
Instead Mnangagwa should do everything his government can to reduce the shortage of real (rather than fake) cash that is crippling the local economy, reducing local production and corporate and consumer cash flows, and driving an already weakened economy further into recession.
He should also be focused on taking a number of other bold steps to try and reverse the collapse of the country’s economy. Among them are bringing state looting to a halt.
The cash crisis
The US dollar is the official currency of commerce. But because Zimbabwe’s economy has essentially ground to a halt, it has few means of bringing new dollars into the country. That, and the steady money laundering of real dollars by high-level officials of the ruling Zanu-PF party, has drained the country of currency.
The government has printed $1 bond notes — known as zollars – for Zimbabweans to use instead of real dollars. They are supposed to be exchangeable at par, but in 2019 they are worth as little as a third of a paper dollar. Many merchants refuse to accept zollars at all.
Bond notes now trade on the black market at 3.2 per dollar, according to the Harare-based ZimBollar Research Institute.
The stress has also spread to financial markets, with locals piling into equities to hedge against price increases.
Mnangagwa may be attempting to obtain loans from Russia and from shady Central Asian countries like Kazakhstan. But what the president should be doing is prosecuting and imprisoning his corrupt cronies. That could limit the flight of dollars from Zimbabwe.
He also needs to trim the bloated civil service of excessive patronage appointments. Most of all, if he dared, he should be cutting military expenditures. Zimbabwe has no imaginable need for its large and well equipped a security establishment.
Such bold measures could return confidence to the country’s corporate and agri-business sectors. If coupled with reduced military and other expenditures, and bolstered by funds no longer being transferred overseas, Zimbabwe’s long repressed economy could take off from a very low base.
Raising petrol prices in a land where but a few months ago supplies of petrol were short and motorists queued for hours and days outside stations is neither politically nor economically wise. The newly aroused protesters will not readily melt away. Putting such a hefty extra charge on an essential commodity, and doing so just when Zimbabwe’s parlous economy was beginning to show signs of stability, shows few leadership skills and little common sense.
Inflation has soared since the national election in July, almost reaching the Sudanese level of 70% a year. Foreign capital and domestically reinvested capital is avoiding the country.
On top of this, exporters are struggling under draconian Reserve Bank regulations. Only Chinese purchases of ferrochrome, other metals and tobacco, keep the economy ticking over, albeit in an increasingly dilatory manner.
A further drain on confidence and economic rational thinking is the Reserve Bank’s allocation of whatever hard currency there is to politically prominent backers of the president. That is how arbitrage during President Robert Mugabe’s benighted era helped to enrich his entourage while sinking the Zimbabwean economy and impoverishing its peoples.
Work that needs to be done
Mnangagwa’s regime has much more work to do to stimulate sustainable economic growth. He will need to restore the rule of law, badly eroded in Mugabe’s time, put some true meaning into his “back to honest business” promise, and widely open up the economy. That would mean eliminating most Reserve Bank restrictions on the free flow of currency and allowing the entire Zimbabwean economy once again to float.
Most of all, Mnangagwa needs to rush home from Russia and Asia and rescind or greatly reduce the price of petrol. After so many years of repression and hardship, Zimbabweans are out of patience.
ZIMBABWE’S revenue collections surpassed $5 billion after a tax increase on electronic transfers buoyed December collections to peak at $572,4 million, official data has shown.
In a bid to shore up depleted government coffers, authorities in Harare increased the tax on intermediated money transfer to 2% per transaction from the initial charge of one cent per dollar transacted.
According to the Information ministry, the tax saw collections reach $572,4 million as at December 26, surpassing the monthly target of $129,1 million.
By November, the tax agency had already met this year’s revenue target of $4,7 billion.
Zimbabwe Revenue Authority (Zimra) commissioner-general Faith Mazani said earlier this month that revenue collection had been consistently above target from January to November 2018 on the back of various interventions aimed at maximising collections.
Last year, the actual gross revenue collections totalled $3,978 billion, ahead of the target of $3,4 billion by $350 million. The 2% tax has been an emotive subject for most Zimbabweans who are already overtaxed and have to carry the burden of sustaining a wasteful government.
Zimbabwe’s government is solely funded from tax revenue.
Finance minister Mthuli Ncube has, however, justified the tax increase, pointing out that Treasury will channel the revenue towards the development of public infrastructure.
With recurrent expenditure taking up more than 90% of government revenues, the country has not made any meaningful investment in public infrastructure.
According to official data, over the last 17 years, government has spent a paltry US$180 million towards the maintenance and development of public infrastructure, but Ncube is upbeat that the unpopular tax will shore up government coffers to allow for meaningful investment towards infrastructure.
For 2018, government had a $748 million budget for capital projects.
The figure, according to Ncube, is set to increase to $2,6 billion — $1,1 billion coming from the budget and $1,5 billion off budget. Development partners are expected to contribute $99,4 million of the off-budget financing, which will be mostly targeted at energy, water, transport and irrigation, while statutory and public entities’ own resources will contribute $390 million.
Government officials have also indicated that the money will be used to service debt and to finance the recruitment of primary and secondary school teachers. Government is looking to employ up to 3 000 teachers as well as 351 new teaching and non-teaching staff for State universities.
The country’s once revered education system has come under heavy strain over the years as the economy continues to weaken. Staffing levels in mostly rural schools have plunged with teacher to pupil ratios being as high as 1:50 in some cases, while infrastructure has deteriorated.
Agriculture is taking centre stage in plans for the revival of Zimbabwe’s ailing economy under the new leadership of Emmerson Mnangagwa.
Getting agriculture moving in Zimbabwe is a big task. The radical land reform of 2000 has left many outstanding challenges; not least the importance of compensating former farm owners. But the biggest challenge is that, with new ownership patterns, the agricultural sector has a much more diffuse base. Today there are many small to medium sized farms, rather than a few major players.
This has implications for what Mnangagwa does next. What are the top priorities for agriculture, and what can be learnt from the challenges faced since the land reform?
Research we’ve done over the past 18 years provides some useful pointers. We have been tracking what has happened to land reform farms across Zimbabwe, with sites in Masvingo (in the dry south-east), in Mvurwi (north of Harare) and in Matobo (in Matabeleland). We have been looking at both smallholder production (in so-called A1 areas) and medium-scale commercial farms (so-called A2 allocations), as well as outgrower arrangements in lowveld sugar estates.
The results have been surprising. Despite the woeful lack of support, the smallholders have done reasonably well. Most are producing surpluses and reinvesting in their farms. Around two thirds have produced more food than just for subsistence in nearly all years that we’ve conducted the research. In Mvurwi, tobacco dominates, and the smallholder-led tobacco boom has brought significant investment, both on and off-farm.
For their part larger landholdings have struggled. Lack of finance capital for many has meant they have not got off the ground and some have significant areas of under-utilised land, with infrastructure in disrepair.
The exceptions are those operating under contract arrangements with estates. These farmers have done relatively well because they’ve been supported and finance has been guaranteed. New contracting and joint venture arrangements are emerging in some areas, but much more needs to be done.
Ten priorities for agricultural development
Drawing on this experience, below I suggest ten priorities for getting agriculture moving once the first tasks of paying compensation, undertaking a land audit and establishing an efficient land administration system are complete.
Land tenure security should be assured through issuing 99-year leases for larger land reform farms and permits for smaller farms. This should be complemented by clear regulations to avoid land concentration and to facilitate women’s access to land. This can be achieved through a multiform tenure system based on trusted, secure property relations.
Getting private bank finance flowing is essential. Bankable leases will help, as will the acceptance of a range of forms of collateral by finance institutions. State assurances and the building of trust will be key.
Partnerships and joint ventures will be significant for some larger farms and certain crops, where external finance and expertise are essential. Already Chinese involvement in tobacco production is proving to be important. Opening opportunities for the return of highly skilled former white farmers will be significant too. Regulations to ensure such partnerships are truly joint and involve the transfer of skills are vital.
Government loans for agriculture are currently offered through the “command agriculture” programme. Focusing on larger farms with irrigation infrastructure, it has shown some success in the past season. But such programmes should not be abused for political ends. And it’s essential that loans are fully repaid.
Access to markets
Linking diverse producers to markets is essential. Too often smallholders get poor value for their products, but ensuring local content purchasing by supermarkets, reduced red tape and support for investment in transport infrastructure will help. Already the reduction in market transaction costs through the removal of many police roadblocks has had a massive, positive impact, as fewer bribes have to be paid.
The country must work on developing value-added activity around the agricultural sector. Local processing and packaging would ensure employment along the value chain. And preservation, processing and selling to niche markets could offset risks, such as a glut in horticultural products.
Smart support systems
Extension advice and market support through IT applications is increasingly feasible, given growing connectivity and the wide ownership of smartphones. This means farmers can be offered more attuned and useful advice. A wholesale rethink of agricultural extension and support services is therefore required.
Irrigation is essential to boost production in dryland areas, especially given the increased variability in rainfall patterns due to climate change. But this should not involve expensive, large-scale schemes. Instead they should be focused on supporting farmer-led irrigation, using small pumps and pipes bought locally. External intervention should be focused on improving water use efficiency and management.
Appropriate mechanisation is another priority. Again this shouldn’t be focused on the large-scale options of the past. Small-scale mechanisation, such as two-wheeled tractors and motorbike-drawn trailers may be more appropriate and affordable, and less subject to patronage, than large tractors and combines. For larger equipment, cooperative arrangements or private hire schemes could work, supported by online infrastructure and training.
Local economic development
Agricultural development needs to be seen as part of local economic development. It must be integrated into wider planning and investment frameworks at a district level, with new farms of varying sizes linked to small towns near land reform areas, where new employment and service provision opportunities open up.
These ten suggestions together could make a big difference, both to the economy and to farmers’ livelihoods across the country. Let’s hope that President Mnangagwa’s commitment to agricultural development is translated into action - and soon.
President Emmerson Mnangagwa says his government was ready to seize and redistribute tracts of idle farmland mostly owned by his top Zanu PF allies.
This follows a land audit which unearthed multiple farm ownership by influential officials in violation of the one-man-one-farm policy by government.
"The land reform program is done and dusted," Mnangagwa said while addressing some traditional leaders in Kadoma on Monday. "As government, we have embarked on a land commission audit. The audit has unearthed that most of the bigwigs have more than one farm."
To address the anomaly, President Mnangagwa said government was going ahead with plans to repossess the farms for redistribution to other Zimbabweans who did not benefit from the country's controversial land reform process in the past 18 years. Mnangagwa also said his government would also move to downsize some of the farms considered too big.
"The preliminary reports have shown us that most senior officials within the party (Zanu PF) have more than one farm.
"As government, we are going to address the anomaly. We are going to repossess those farms and redistribute them. We are going to downsize on some of the farms.
"There are some individuals, very influential, whom we cannot name who have more than one farm and we are going after them," he said.
The Zanu PF led government, then under the now former President Robert Mugabe, in 2000 embarked on a violent land reform process which saw militant war veterans storm white owned farms and grabbing implements, livestock and farm houses.
The chaotic exercise saw some locals allocated pieces of land to both build homes and to fend for their families. Some influential government officials and security bosses used their stamina to grab bigger and more fertile pieces of land with rich infrastructure while some even went for more than a single farm. Although he led the one-man-one-farm mantra, then Mugabe was this year said to be owner of 21 farms, some of which he secretly leased to white farmers.
However, other reports linked the once feared leader to a total 13 farms under his and family ownership.
"I am still receiving evidence of what the (former) first family had. When that process is complete they will select one farm and the rest will be given elsewhere," Mnangagwa told the Independent Foreign Service in a wide-ranging interview August this year.
"It's not a question of voluntary giving up, but about complying with the policy."
Mnangagwa, who is often regarded as a reformist, has refused to return land into the hands of its former white owners saying the land reform process was "irreversible".
Credit: New Zimbabwe
Zimbabwe's President Emmerson Mnangagwa on Friday laid the foundation stone for huge new parliament to be built with Chinese funds outside the capital Harare.
The imposing circular complex will be built over 32 months by the Shanghai Construction group at Mount Hampden, 18 kilometres north-west of Harare, the Zimbabwe Broadcasting Corporation reported. Officials say the current colonial-era parliamentary building in the city centre is too small to accommodate lawmakers.
Mnangagwa said at the ceremony that China had provided a "grant, not a loan, to build a new parliament", without giving a figure.
"Other facilities like banks, hotels will be built around this place," Mnangagwa said adding that a "modern, smart city" was planned.
Mnangagwa took over from long-time ruler Robert Mugabe who was ousted by the military in November 2017.
He has vowed to revive Zimbabwe's economy that has been in ruins for nearly two decades.
China has funded and provided loans for many infrastructure projects across Africa in recent years, ranging from roads and power plants to sports stadiums and government institutions.
Critics say China's increasing sway over the continent undermines democracy and sovereignty.