Dr. Amai Goes To Rome

After two weeks of highly publicised speeches across the country, zero babies kissed, a billion air miles by presidential helicopter, daily front-page coverage and ten million tonnes of maize later Zimbabwe’s First Lady Dr Amai Grace Mugabe, as she is now known according to state media, appeared for the first time in public with her husband President Mugabe on a trip to visit His Holiness Pope Francis at The Vatican.

This has surely put to bed all the speculation about wether our dear leader supports Dr Amai’s ambitions, whatever they may be, but that’s a story for another day. It was just the other day that all religious leaders leaders with any shred of association to the ruling party beat a path to Dr. Amai’s Mazoe mansion, sorry, orphanage, to pour their blessings upon her whilst she in turn showered them with platitudes and Mazoe. Prior to and since the press has regaled us with quotes of Dr. Amai’s many conversations with God and possibly other spirits leaving us in no doubt she is, as they say these days, a prayerful woman.

Now with Dr. Amai apparently being imbued with all the abundant Godliness in our beloved Zimbabwe, she has gone where no other Presidential aspirant has gone before, to His Eminence himself, God’s representative on Earth no less, Pope Francis. Maybe I’m just a conspiracy nut but if I was one of those tithe-seekers who had braved the sun and the dust to lay my hands on Dr. Amai’s fair head when summoned two weeks ago I would be wondering, ko how far?

VanaMadzibaba and others who thronged Mazoe so recently must be wondering is there no ZIMASSET in religion? What of indiginisation? Was their blessing of Dr. Amai not enough that she had to go all the way to Rome to receive communion from that church that now wants to marry homosexuals?! Even going to see T.B. Joshua would have been better. Surely Dr. Amai had gone there navaMugabe to convince His Holiness that this is not the way and since the bishops have postponed their discussions on homosexuals it is proof enough of Dr. Amai’s growing influence. No? Prove it.

Another community that must surely be questioning Dr. Amai’s first international trip since her anointing is our beloved diaspora. Logic follows that as “your Mother of the Nation” her first trip would be to the millions of “children” living in South Africa and the UK. As the unifying force that she is, imagine the hundreds of thousands that would come out to show their truest feelings for this symbol of regeneration, peace and unity?

An FNB stadium, coincidentally already orange like Dr. Amai’s beloved Mazoe Crush would reverberate to the sights and sounds of vana vevhu there to see only her, oh just the thought of it makes my eyes water. What more at Stamford Bridge, the only blue stadium, because you don’t want to confuse the children with a red stadium like The Emirates, Anfield or Old Trafford, full to capacity? Not to forget the shopping, I’m sure Comrades Chiyangwa, Zhuwaou and her other backers can afford to extend Dr. Amai every luxury during such a trip were it to happen.

I think this is an opportunity for inclusion of the diaspora that is going begging. Sanctions you say? What country would deny a mother the opportunity to see and speak to her children? Even Obama had a mother wani and Amai Obama would understand.

I keep fingers crossed that the the Meet The People roadshow organisers here this and take Dr. Amai to every corner where there is a Zimbabwean yearning to hear her message and express their true feelings to her in person.

Tose kunaAmai!

The Fifth Beatle (Syndrome)

I am no music aficionado but I am sure many around the world have heard of the Fifth Beatle. Various versions of this legend exist, however, I want to use one as an analogy for the quandary that many Zimbabweans find themselves in.

The Fifth Beatle is a title used to describe the member of a group who drops out just before that group hits the big time. You know the story, wife/husband leaves spouse for greener pastures because things are tough only to find the grass is not greener and the abandoned spouse finally finds success. It’s like that other guy from Boys 2 Men or the other girl from Destiny’s Child that nobody remembers. Sound familiar now?

The just concluded elections, like any since 1980, was billed as the precursor to a new era in Zimbabwe. All candidates took on the role of messiah promising political and economic emancipation to the electorate, yet, here we are again, back to a life where the abnormal has become normal. The realisation that things are not any better than on July 30th has been cause for many, who are able, to reconsider whether they should stay in Zimbabwe or they should go on to greener pastures.

I have been one of those who has struggled with this for years and events since July 31 have been cause for much review, despite that I have long been apprehensive about the election process that brought us here anyway. That said, what do I do now?

Do I continue to stick it out and hope for the best or do I pick up sticks, sell what I can and emigrate? In the last decade I’ve had my share of feast and famine, however, I am no longer the youth I was then. Because of that I pay a lot more attention to political rhetoric and it’s impact on my decisions, economic and social.

I know now how the decisions by those in authority affect me and those immediately around me. I’m smart enough to know what my bank managers means when he or she says their interest rate is high because it includes a political risk component. I’ve heard so many acronyms for mostly failed business funding initiatives that my head spins at the thought. I understand what the Reserve Bank Governor means when he says the country is in the midst of a crippling liquidity crisis. I can see the holes in the government’s indiginisation policy and the dangers inherent in it’s implementation. I know what it means to foreign investors when the industrial index loses 10% in one day and 14% in a week and the government makes statements contrary to economic development.

Besides commitment to family and this being the country of my birth, what else keeps me here? I must acknowledge there is an element of fear of missing out on Zimbabwe’s recovery when it eventually begins. Paradoxically, the longer this recovery takes to come, the greater this fear becomes and the greater the lost opportunity becomes in one’s mind. The fear of the unknown and regret over the journeys not taken can be paralysing. Am I the only one who is going through this? I don’t think so. To those in the same situation I wish you well, your decision is your own, as for me, it’s time I risked being the Fifth Beatle.

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Why Zimbabwe doesn’t need loans and aid.

President Mugabe and Justice Minister Chinamasa are right, Zimbabwe does not need donors to fund the upcoming elections. In fact, Zimbabwe should not need ANY financial aid whatsoever.
Much was made of Minister Tendai Biti’s statement in April 2013 that South Africa was about to release Balance of Payments (BOP) support for Zimbabwe to the tune of $100 million, as we all now know, this only succeeded in embarrassing his opposite number Pravin Ghordan and both governments. Following the ensuing media storm, no money came and the country continues to live from hand to mouth. Months later not only does Zimbabwe still not have BOP support but the government has also spurned election support from the United Nations and the politicians are again haggling over election dates causing much anxiety in the country and the Southern African region. In all of this the question of how these elections are to be funded has not been answered and every time a solution seems to have been found it slips from the nation’s collective grasp. But is aid really the only option?

Externalization

It is common cause that since independence in 1980 Zimbabwe has suffered undocumented capital flight running into potentially billions of Us dollars. In 2004 this practice came to be known as externalization and examples of this include:

  • Transfer pricing in the 1980s and 1990s whereby manufacturers exported goods cheaply then imported the same goods back into Zimbabwe at hugely inflated prices.
  • Under-pricing of exports only to sell them at their proper price once off-shore and the bulk of the money kept out of Zimbabwe.
  • Blatant smuggling of precious and unprocessed minerals to avoid declaring them as exports thereby not remitting the subsequent proceeds.
  • Banking malpractice that peaked in 2003 but continues unabated today including but not limited to manipulation of exchange control regulations.

Under Reserve Bank Governor Leonard Tsumba, 1993-2003, the country began to see the effects of externalization, this peaked in 2000-2003 with the liberalisation of the financial services sector, particularly banking,  typified by the rapid unchecked growth of indigenous players. Upon his retirement Dr. Tsumba was replaced temporarily by Charles Chikaura in an acting capacity until the appointment of  Dr. Gideon Gono in late 2003. On his appointment by President Mugabe Dr. Gono promised to clean up the financial sector which by then was widely perceived as the catalyst of Zimbabwe’s economic downturn. Dr. Gono’s initiative led to five years of sensational arrests, escapes, international chases, court cases, asset seizures and more with the list of suspects including many of the country’s business leaders at the time. Some of the accused even chose self-imposed exile to escape prosecution leading to failed requests for extradition by the RBZ through the police’s Serious Economic Offences Unit. By 2008 though the whole exercise had fizzled out into nothingness amid presidential pardons and the pressure of legal challenges on constitutional grounds. Though some of the cases are still ongoing, little of the plundered wealth has been recovered.

The dollarization of the Zimbabwean economy that followed the signing of the Global Political Agreement (GPA) in late 2008 was the catalyst for the recovery of the economy and this was strengthened by promises of financial support from all SADC nations in 2009. Despite much fanfare and a number of false starts, nothing of substance has been forthcoming and Zimbabwe’s recovery has been predominantly domestically driven and has predictably, stalled.

Illicit Capital Flight In Perspective

Considering that it is reasonably suspected that there are hundreds of millions possibly billions of dollars that have been siphoned out of Zimbabwe sitting in foreign bank accounts, the mind boggles that the Ministry of Finance is not actively engaging foreign governments and banks to institute legal proceedings against the account holders in an attempt to recover these funds. Only in 2013 did a bill go before parliament with the express purpose of tackling externalization. The Microfinance Bill is yet to be signed into law but only seeks to attach assets domiciled in Zimbabwe. It is unclear how far back the act can be enforced once signed into law thought the RBZ and the Ministry of Finance have said that as at February 2013 exporters had not repatriated $360 million. As at today it is unclear what measures either institution has taken to ensure the repatriation of these funds. In 2008 the Political Economy Research Institute at the University of Massachusetts Amherst published a report on capital flight from forty sub-Saharan Africa in the period 1970-2004 by Zimbabwe is estimated to have lost $16 162 000 000,00. For the full report go to http://www.peri.umass.edu/fileadmin/pdf/working_papers/working_papers_151-200/WP166.pdf.

New International Best Practice

Recently the Lybian Transitional Authority has made global headlines in its attempts to recover tens billions of dollars funnelled out of the country by the previous administration. Particular emphasis has been on South Africa which has acknowledged the existence of such investments and indicated its willingness to repatriate the funds despite their scale not having been finalised. In Zimbabwe it is unclear if the Microfinance Bill will make provision for such action by the Ministry of Finance and if so, how the Ministry will be capacitated as it is yet to be signed into law. If the government were serious about recovering externalised funds they would have speedily enacted this Bill in 2009 and by now the nation would surely have seen results. It is an indictment on the government and the finance ministry in particular that it is not known how much the country is losing annually to externalization and no effective measures have been instituted to recover what has already left or to stop the bleeding. Kofi Anan and the president of the African Development Bank Donald Kaberuka have both come out strongly against capital flight from Africa fuelled by corruption and fraud. With institutions like the AfDB willing to assist in recovering illicit capital transfers to their rightful states and the precedent set by South Africa in the Lybian case, what is Minister Biti waiting for?

Zimbabwe’s diaspora question and it’s economic colonisation.

A little spoken about part of our history is that the story of the Zimbabwean Diaspora is as old as the country itself. Members of our first government, including the chief architect of our first constitution the late Edson Zvobgo, spent much time abroad. Members of my family studied for years abroad returning home after 1981. Diasporans were a big part of the establishment of the society that we came to know as Zimbabwe especially in healthcare, education and policy formulation. The country welcomed back her educated sons and daughters and the rest is, well, history.

In 2000 we saw the beginning of the culmination of a number of bad governance decisions which led to the first significant wave of Zimbabweans leaving the country for elsewhere. Without verifiable statistics, it is still not known how many Zimbabweans have since emigrated or the nature of the migration trends. What is verifiable though, is that the relationship between Zimbabweans at home and abroad has, at times, been strained in large part due to the economic effects of what has come to be known as “Zimbabwe’s Lost Decade” from 2000 to 2010. During that period many Diasporans sent remittances home to relatives saving many, many lives. Today numerous families continue to receive remittances from abroad, allowing them a better quality of life. Diasporans also invested in the economy through building homes and establishing businesses. Given all this, I believe that some perspective is needed, we must differentiate between family obligations and suggestions of unacknowledged economic patriotism.

Jump to today and read posts on sites such as swradioafrica.com, newsdzezimbabwe.co.uk, thezimbabwean.co.uk and nehandaradio.com you can be forgiven for concluding Zimbabwe and it’s government, are solely reliant on diaspora remittances. Recently an article, typical of such reporting, by Tanonoka Joseph Wande appeared on SW Radio Africa’s site entitled “Zimbabwe must give better recognition to those in Diaspora”. I take issue with this position because whilst it is indisputable that remittances have saved lives for over a decade, it is not unreasonable to assume that the bulk of this money has gone into consumptive expenditure such as food, accommodation, health, clothing and transport. Who would not help their family if they were in a position to do so? Taking care of ones’ family by sending money home is no different from anyone in Norton, Harare, Bulawayo or Filabusi earning a paycheck to do the same. The suggestion that diaspora remittances and the remitters are more Zimbabwean, deserving greater recognition than those at home is simply ridiculous. Today’s Diasporans take care of their families just as everyone else does every single day, is the fact that those relatives are alive and well not recognition enough for their efforts? What is this sense of entitlement and what exactly is it that they feel entitled to? I have a theory that goes back a few years.

In 2006 Zimbabwe’s Reserve Bank Governor Gideon Gono was at the height of his powers, people even referred to him as our de-facto Prime Minister, a reference he never publicly objected to. In an effort to mobilise foreign currency the Reserve Bank (RBZ) established its subsidiary Homelink targeting Zimbabweans living abroad. Homelink’s mandate was to offer investments, money transfer services, and mortgages to diasporans wanting to build back home, Governor Gono even went as far as to say Diasporans were the country’s greatest export as they earned Zimbabwe foreign currency and the more young people who went abroad the better. Meanwhile, home-based Zimbabweans were not afforded such opportunities and for the majority, holding foreign currency was a serious criminal offence. I wrote to the Governor advising that this preferential treatment of Diasporans could lead to issues with those at home who were bearing the brunt of the economic collapse fuelled by government profligacy and short-sighted, often punitive, government policies, a situation akin to Charles Dickens’ A Tale of Two Cities, if you will. I never got a reply and as fate would have it, I was to be proven right.

Gono’s policy of Diaspora appeasement found a face in Professor Arthur Mutambabara when the latter became the leader of the splinter MDC party, a Diasporan came home to lead a political party and went on to become Deputy Prime Minister shortly thereafter. This policy found further political support in the government established under the Global Political Agreement (GPA) of 2008 with all kinds of promises being made to woo Diasporans back home, however, when these promises went unfulfilled the Diaspora was not shy in calling out the politicians involved resulting in some embarrassing incidents. Now we are inundated with constant calls for “the right conditions so we can come home”.

Diasporans often say “if things were right” they would be on the next flight or bus home, question is, what are these “right things” and who do they expect to make them so? I’m inclined to believe these are insincere statements made by people who maybe feel embarrassed that they are better off than those they left behind yet know they are at a loss to do anything about it. The majority of Diasporans have become comfortable in their adopted countries and I say good for them, however, whilst many go about their daily lives there are those who have taken on the mantle to save Zimbabwe from itself. This effort has been predominantly political in nature with little, if any, economic aspects. There is a disconnect between Diasporans and those at home when it comes to how to overcome our many challenges, especially, which challenge to deal with, how and when. Diaspora activists seem to not realise that whilst they may have overcome their own economic challenges, they are at different levels of Maslow’s Hierarchy of Needs to the many at home who struggle daily for food, accommodation, education, health and work. If Diasporans, as a collective, were serious about participating in the economy, they would have already done much more, it’s not as if they haven’t had over a decade to prepare. Granted there are those who are making efforts to do business at home but without coordinated private sector employment and capacity creation, their efforts will not  result in much of a change.

In my interactions with Zimbabweans who have succeeded abroad, many have little economic interest in Zimbabwe beyond providing for their families still here. They talk of entry-level investments to establish a presence so that when “things come right” they will be able to respond quickly, really? Ask them why or when this will be and they list every possible reason why they can’t invest or raise their children here. Oddly enough, the country and it’s investment climate is good enough for their relatives to live in and also good enough for Chinese, Russian and South African investors as it is. Is it any surprise then that China and South Africa are Zimbabwe’s top investors enjoying numerous incentives whilst we go on ad infinitum about how educated and talented our people are at home and abroad? With all our worldly cleverness why are we yet to see adequate liquidity in our banks to support our private sector? Successful and prosperous Zimbabweans are to be found in probably every functional economy on the planet  yet our own economy lurches from one dismal year to the next.

We have fallen for the myth that our national salvation lies in the Chiyadzwa and Marange diamond fields being mined by the Chinese, South Africans,Russians and faceless locals with little benefit to the nation. Another myth we are fed is that everyone can be a farmer or an entrepreneur or part of an indiginization consortium so they can enjoy the economic fruits of our sovereignty.  With formal unemployment estimated at over 80% it is pure fantasy that the latter measure will work, where will the demand come from? We will promote our exports to the East you say? What happens the day they decide to go shopping elsewhere? Over 70% of South Africa’s highest earners are in executive employment, the same is true of established first world economies, logic would follow that Zimbabwe should focus on sustainable employment creation if it hopes to create wealth,this is where I would expect the Diaspora to come in. What sense is there in having 4000 black tobacco farmers replace 400 whites producing the same volumes and exporting unprocessed leaf to the East? Since 2000 there are now three cigarette manufacturers from one yet most of the leaf is still exported unprocessed. In mining chrome miners lobby government to allow them to export raw chrome as they have failed to build refineries yet a Chinese firm is now in the process of building a number of them around the country. According to the Daily News of 15 October 2012 the country holds 12% of the world’s chromite reserves and accounts for 1,2% of world production down from 5% in 2000. Those Diasporans skilled in mining who can protect and develop this national asset have been found lacking.

Zimbabwe has been reduced to a base agriculture and mining economy with little processing, refining and manufacturing activity or capacity. The services, notably banking, and retail sectors enjoyed a growth spurt after dollarisation in 2009 but this has proved to be unsustainable with more players but no growth in the customer base. This has resulted in cannibalism amongst the retailers and drastic restructuring amongst the banks. There has also been increased participation of foreign players in both sectors,

  • South Africa’s Pickn’Pay now owns 49% of TM Supermarkets and is currently rebranding their major stores,
  • MBCA bank is majority owned by Nedbank South Africa, Premier Bank was bought out and rebranded by a Nigerian bank whilst NMB and Kingdom banks have sold equity to foreigners.

Once more Diasporans are found lacking and again I wonder, what “right things” are they waiting for?

Zimbabweans need to rekindle that spirit of the 1980’s that brought our many talents together except this time, with the benefit of experience gained over the last thirty three years. We need to divest ourselves as a people of the sense of entitlement that has handicapped us the last thirteen years. We believe we are entitled to jobs, electricity, clean water, good schools for our children, good roads, clean air and all that life has to offer, however, belief needs deeds or it remains only an idea. If those in a position to make this happen remain on the sidelines they will wake up one day to find that Zimbabwe’s economy has been completely colonised and they will be strangers in their own land, Diasporans who withhold their money, skills and other resources in protest at a supposed lack of recognition are ill-advised.

Harare property boom or bubble?

Earler today I read an article by Mail & Guardian journalist Jason Moyo about the high end property boom in Harare. This got me thinking, who exactly is Moyo writing for, because from my knowledge of the Zimbabwean economy and its unforgiving ways, the article seemed rather one-sided. What I found strange, amongst other things, was how the fund managers interviewed say they struggle to get information to clients in New York, this you have to take that with more than just a bucket of salt. The fact is the information is there, everywhere but they just can’t package it in a way traditional investors would understand, because they themselves don’t understand what’s going on. Zimbabwe has unique problems and opportunities that defy convention so a fund manager or stockbroker are possibly ill-placed to give a view of what’s actually happening on the ground. Their profession is also synonymous with every stock market crash and property bubble since the first crash and bubble so I tend to take what they say with skepticism. You’re better off talking to property agents, buyers and actual developers. A boom you say? I’d call it a bubble because it is not backed by clear economic and infrastructural fundamentals. As Moyo states in his title, this is being driven by the “Zim diaspora” who, aside from being originally from Zimbabwe are no different from other short term investors (read opportunists) looking for highly profitable areas to park their money. This housing “boom” is not backed by any sustainable upswing in economic activity but on the premise that this upswing is just around the corner. To paraphrase from a scene in Quentin Tarantino’s epic Kill Bill Volume 1, recovery is not a straight path, it is a forest. Diasporans will not save Zimbabwe, if they were going to, they would have done so already, they are investors first, with patriotism not exactly a major priority.
Zimbabwe is currently not making any new millionaires, officially anyway, as growth has been pedestrian the last two years after the initial hype of dollarization and the Global Political Aagreement GPA. Without tangible growth, where are the occupants of the plush new mansions going to come from? These developers are making investment decisions as they already own primary and secondary homes, possibly farms even. Once the buying spree doesn’t kick off as promised, expect a sell-off of note. Another thing is Harare is notorious for its poor water infrastructure, especially in Borrowdale, so how are the developers getting around this? Poor service delivery has added to the costs of residential developments in Borrowdale particularly and Harare in general for many years and has steadily gotten worse. Though this work is currently ongoing, it will take some years still to rectify this situation compounded by the unrelenting urban migration into the Sunshine City.
So a boom? I don’t think so, it will be interesting to see how large this bubble grows before it bursts and who it will take with. I sincerely hope it will deflate before then but if it doesn’t, thankfully this is funded mostly by off-shore money and the burst will have little effect on the national economy as the amount of local resources being allocated to this is minimal.

Here is a link to the Mail & Guardian article: http://mg.co.za/article/2013-04-19-zim-diaspora-drives-property-boom

What if Zimbabwe didn’t import second-hand Asian and European vehicles?

Botswana recently followed South Africa’s lead and banned the operation on its roads of vehicles older than five years imported from Europe and the UK. This has put Zimbabwean importers of these vehicles under pressure as they are now forced to either drive the vehicles through Namibia or put them on some sort of transport. Predictably the “sector” is up in arms.
Earlier this week a local car assembly and distribution company Quest Motors announced they are on the verge of closing their doors due to lack of business, spiraling costs and competition from importers of European and Asian vehicles. Willowvale Mazda Motor Industries the only other Zimbabwean vehicle assembler, has effectively stopped production of its sole vehicle, the Mazda BT-50 from once having three assembly lines working simultaneously. I Zimbabwe we talk a lot about our sovereignty, economic freedom and the entrepreneurial spirit, often with almost religious fervor. How then does this tie in with killing our local businesses in the name of self-enrichment and saving a buck? If we are serious about rebuilding our economy should we not then be lobbying our government to make locally assembled vehicles and financing more accessible? Instead of crying sabotage when the government tried to limit the importation of Left Hand Drive (LHD) trucks and cars, should we not instead have challenged them to make equivalent and safer vehicles available?
It makes simple sense to me that if our revenue authority, ZIMRA, charged fair duty on the importation of new motor vehicles instead of the current +100%, we would have many more quality vehicles on our roads leading to a lesser drain on financial resources and a lower death toll on our roads. We would also have more sustainable job creation in the motor industry and related sectors, allowing the ZIMRA to recover what they lose in duties from the many additional sources of income created. Not everyone and their uncle has to be a vehicle importer or trader, let’s look to other businesses that can contribute to growing a real economy. —