Old Brooms For Old Corners.

This morning I, along with everyone else who is not a member of Team #NoSleep, woke up to the news that President Mnangagwa had announced his 22 member cabinet late last night. It seems some were ready with analysis and opinion pieces literally the moment the press statement was released, something I find quite odd seeing as most of these ministers have not even had a chance to put bums to seats let alone outline policy. Some have even complained that this has taken “agonisingly long”, as if the President was sworn in barely a week ago and has had a lot on his plate. Many have complained about the retention of many familiar faces that have been implicated in corruption in the past and at best have shown lack-lustre performance in their decades in cabinet. I too look at their retention with trepidation but I believe, as I will try to outline below with a focus on economics, that context is key. I will leave the implications of installing military men in cabinet to others more qualified.

The ghosts of still-born mega-deals.

When Chris Mutsvangwa was still ambassador to China he led the effort to secure deals with that country which, whilst great for the Chinese, did not yield the desired results for Zimbabwe due to various reasons, chief amongst them ZANU PF infighting for a slice of the action going back to at least as early as 2005. Following the 2013 elections much was made of mega-deals with China that would ensure Zimbabwe’s recovery and the success of ZANU PF’s economic blueprint ZimAsset, to date it is unclear what exactly these mega-deals were or are. None of this came to pass as four years later the country is in a far worse economic condition to the point the army even noted this as one of the reasons for their coup that wasn’t a coup. Again, it is still a mystery as to why the mega-deals never materialised however I have it on good authority that ZANU PF and in effect, presidential, succession was a nagging issue for the Chinese who wanted assurance of continuity after Mugabe. As we all know now, Mugabe’s idea of succession was not that popular outside of Blue Roof.

Another mega-deal that seemed to mysteriously go up in smoke was the 2015 multi-billion dollar Dangote investment in power generation and cement manufacturing. After a flurry of activity reportedly under the personal watch of then VP Mnangagwa himself, Zimbabwe’s government went to all lengths to facilitate the consummation of the deal only to be tripped up by political risk concerns. This deal, like those with the Chinese have been on ice for years now, could the change in government be what breaks the impasse? Granted much has happened around the world as China and Dangote have turned their attention to other markets but a repackaging of these deals by Chinamasa, Bimha, Mutsvangwa and a willing President Mnangagwa could see them back on track and finally spur into life Zimbabwe’s recovery.

The Lima Plan.

In 2015 Finance minister Patrick Chinamasa was on an outreach mission to reengage international lenders who had long abandoned Zimbabwe for failure to repay debts. This culminated in a trip to Lima Peru where he presented an ambitious plan to repay all debts to the International Monetary Fund, World Bank and African Development bank simultaneously by end April 2016. As has become the norm, Zimbabwe missed this deadline and was therefore unable to access further lending despite government’s claim of a billion dollar lifeline from global commodities firm Trafigura to pay the World Bank that never materialised. With Zimbabwe enjoying a now enjoying renewed attention from global lenders and development partners, could there be a resuscitation of the Lima Plan in the short term and a restoration of credit lines within the next six to eight months? The first test will be the visit by the IMF to Harare next week.

Out with the Populists in with the Reformers.

Former President Mugabe never really enjoyed a good relationship with his finance ministers particularly from the start of the current economic crisis in the late 1990s namely, Herbert Murerwa, Simba Makoni, Christopher Kuruneri and Patrick Chinamasa. The more they advised caution, the worse the relationship, Mugabe famously said to Herbert Murerwa in 2006:

“We are under sanctions and there is no room for the type of bookish economics we have at the Ministry of Finance,” 

Patrick Chinamasa, despite his many mistakes in an effort to please a demanding and diametrically opposed boss, is nothing if not a reformer. He has consistently called for fiscal restraint but only to be rebuffed on occasions too numerous to mention culminating in his recent short-lived move to the now defunct Ministry of Cyber Security.  President Mnangagwa too shows all the signs of being a reformer and in the short term this combination could yield spectacular results for Zimbabwe if Chinamasa is given the independence to carry out the much needed reforms he is all too aware of. It will be interesting to see how his reformist agenda is received by the rest of government. Another man who was brought in as a reformer but had no choice but to tow the Mugabe line is Reserve Bank of Zimbabwe governor John Mangudya. He is now the man tasked with facilitating the return of stolen money under the ninety day exemption and overseeing the recovery of the financial sector and with Chinamasa, dealing with international financial institutions.

Policies, policies everywhere but not a sign of implementation.

It is no secret Zimbabwe is “blessed” with policy crafters but what has been sorely lacking is implementation. If President Mnangagwa is to be believed, his administration will focus on correcting this. It would not be surprising at all if the new administration, rather than start from scratch,  simply dust off the some old policies, update them and get to work implementing. It would save a lot of time, labour and money, especially on critical economic and legal reforms that have been pending for years. So whilst many have criticised this cabinet for being full of the same old faces, I am inclined to believe there is a valid reason for this. These same old faces will not need to start from scratch, they are already aware of what needs to be done, who needs to do it and how. What has lacked in the past is a reason for implementation and this is no longer the case, government has no choice but to fix the economy and to do so urgently. If one wants to take a more macabre view, even those who have been eating know they can only eat from a functioning economy. There is much work to be done and whilst a rising tide lifts all ships, cautious optimism remains the default position at this stage.

 

Based in Johannesburg South Africa, Ricky Marima is a recovering economist and twenty year veteran of building businesses across a variety of industries. He currently works at knowledge startup RemNes where he guides clients across the continent to ask the right questions about the 4th Industrial Revolution. You can reach him on ricky@remnes.com

 

NO VACANCY HERE! A National Moto. (Part 2)

In my previous post I looked at how corporate Zimbabwe has consistently replicated certain traits of the government and political parties. I initially meant for this to be a follow-up outlining how those negative traits have impacted the economy and how they can be corrected, however, this idea was overtaken by events. Over the last three weeks I have worked and reworked the article as one event after another changed Zimbabwe’s trajectory leading me to widen the scope of this post. Now that the political dust seems to have settled, albeit temporarily, the time has come to look at the economy and particularly the private sector’s role in it’s recovery.

Zimbabwe’s Real Economic Dependency Ratio.

A country’s dependency ratio is defined as the ratio of economically active workers compared to inactive. In Zimbabwe one has to take into consideration the fact that the unemployment rate has been stubbornly above 90% for years and despite government’s best attempts to rework the numbers, the truth of a failing economy is impossible to hide. Recently I was told about middle management staff at a certain bank, most of them have been there for a number of years and enjoy numerous benefits including access to hard currency and school fees being paid for by the employer. These people are getting on in years but have no intention of leaving their positions to make space for new blood because of the fear of unemployment. This means there is no chance for upward mobility for those lower down the totem pole, and no chance of entry for those applying for jobs at that same bank. Now extrapolate this to the entire economy and you start to get a sense of the difficulties in reducing the country’s stubbornly high unemployment rate.

As we all wait for the announcement of President Mnangagwa’s cabinet, something I expected to have happened within hours of his swearing in, and government’s economic recovery framework, we have to consider some of the potential landmines that can scupper Zimbabwe’s recovery.

A multi-generational time bomb.

I come from a generation that started their adult life with much promise in the mid-nineties and went through the trauma of watching those opportunities wither and die over the last twenty years. In that period, many Zimbabweans who cam of age have been unable to get jobs and those who did, the vast majority were not able to hold onto them. This has led to two failed generations of Zimbabweans with little to no experience who have been forced to make a living in any way they can yet yearn for the security of a regular pay cheque. We now find ourselves looking at potentially a third failed generation if there isn’t a radical transformation of the economy. Assuming that government and business are able to quickly craft and immediately implement policies that see rapid job creation, how will they deal with three generations all simultaneously seeking employment? These jobs will need to be sustainable and contribute to economic recovery, rather than just be window-dressing.

Government’s wage bill conundrum.

Zimbabwe’s public service has long been plagued by ghost workers, an inefficient and bloated workforce, and a hugely excessive wage bill accounting for over 86% of overheads in January 2017. As finance minister, Patrick Chinamasa tried repeatedly to reduce this wage bill but was blocked by then President Mugabe for purely populist reasons. For any economic recovery strategy to be taken seriously, it will need to include not only drastic cuts in the government wage bill, but also a plan for where these people will go to avoid worsening an already terrible unemployment crisis. Government even went as far as changing the legislation to avoid hefty severance packages. This however, may no longer be possible and if government sought to retrench employees to reduce the wage bill, they would likely have to borrow to fund the process which is something that would bring it’s own challenges considering government’s current inability to borrow internationally and illiquidity of the local market. With an unenviably long list of development priorities it will be interesting to see how government handles this.

The diaspora factor.

Much has been said over the years about Zimbabwe and her relationship with her diaspora, you can find my thoughts here, however, this segment of the population is going to be key to the country’s economic recovery. This will require specific policies to attract this resource back to the country even if it is at risk of a local backlash from those who have toughed it out through the worst of the economic decline. The risk of backlash can be mitigated if policies are designed in such a way as to attract diaspora resources without affording undue benefit, as was done in the past by the Reserve Bank of Zimbabwe (RBZ) under then governor Gideon Gono.

In the past the RBZ’s only way of engaging the diaspora has been through encouraging remittances, this money has almost exclusively gone towards consumptive expenditure. Past efforts to encourage corporate investment have fallen flat due to a well founded lack of trust in the government, despite the positive wave the new administration is riding on, it will take some work to turn this goodwill into investment.

What the future holds.

Some have expressed disappointment that Zimbabwe missed an opportunity for a new democratic dispensation, this view does not take into account the country’s history. Since it’s inception as a nation Zimbabwe has never known the type democratic dispensation that they imagine and this was never going to happen with the cast of characters behind this latest change of the guard. To be frank, Zimbabwe is a quasi-authoritarian state with a strong military influence on governance. Looking at the continent this may actually not be a bad thing for the economy when one considers that Africa’s fastest growing economies are similarly structured, Rwanda, Ethiopia and Egypt, which recently overtook South Africa as Africa’s largest receiver of foreign direct investment (FDI), all fall into the quasi-authoritarian mould. Rwanda’s Paul Kagame who regularly wins elections with more than 90% of the vote has been referred to as a benevolent dictator. Maybe the question Zimbabwe needs to face is, how much democratic space are we willing to give up for economic recovery and subsequently growth? Going by the events of the last two weeks this question may already have been answered for us.

Whilst I do not trust politicians, I do have utmost faith in their instincts of self-preservation and this new administration in the making has shown unique tenacity in coming back from the political brink to force the resignation of Robert Mugabe. If this is anything to go by, the easiest way for them to hold onto power is to facilitate an economic recovery.  The new government has it all to do and is currently riding on a wave of national euphoria that it still has not fully taken advantage of. Everything hinges on the cabinet announcement and policy direction, the sooner that happens the better. It is notable that the British government have been the first to unequivocally pledge their support for Zimbabwe’s economic recovery and their minister for Africa, Rory Stewart, was on the ground as soon as former President Mugabe resigned. Despite some initial misgivings about the British being the first to show up, I believe anyone stepping up to help Zimbabwe at this point should at least be considered, the country has a long  recovery and the sooner this journey begins, the better.

NO VACANCY HERE! A National Moto. (Part 1)

 

“Like Saturn, the Revolution devours its children.” Jacques Mallet Du Pan 1793 

It has long been known that Zimbabwe’s politicians regardless of party affiliation, are not given to discussions about succession, whilst simultaneously talking about the importance of the country’s youth. The ruling elite continues to introduce laws and measures that not only seek to ensure their privileged status but extend it at the expense of the general population. However, this resistance to succession is not unique to politics.

No Country For Young Folk.

Zimbabwe is a classic case of a country led by people who are stuck on the fact that they liberated the country but at the same time do not recognize that the country is indeed liberated and events of the last twenty years have not helped. To this end, they stay in power purportedly to protect the liberation they ushered in, never letting you forget it. In this spirit of liberation the late eighties and early nineties saw the emergence of a black male business elite buoyed by favorable government policies and generous loans. Whilst there are a number of admirable businessmen who emerged, the not so admirable were never far behind, along with corrupt and corruptible government officials. In 1990 these self-proclaimed economic liberators formed the Indigenous Business Development Centre to “secure” said liberation. Barely four years later the Affirmative Action Group, AAG, was formed in response to the perceived slow pace of progress in IBDC. In reality, it was a collection of the more radical and flamboyant elements in black business who wanted their own platform from which to shine, personified best in the character of one of the founding members, Philip Chiyangwa.  He remains a loud voice in AAG despite no longer being it’s president.

In this spirit of liberation the late eighties and early nineties saw the emergence of a black male business elite buoyed by favorable government policies and generous loans.

One trait in corporate Zimbabwe that emerged in this era and continues today, is a reluctance to let go. Granted, founders and experienced managers have a lot to contribute but you will be hard-pressed to find a Zimbabwean board, public or private that has ever actively groomed new talent and rotated members out at the end of their terms. This is something that was symptomatic before the economic collapse beginning in the late nineties and has only become more entrenched since.

In banking we trusted.

The early nineties saw Zimbabwe welcome a number of black-owned financial services firms most notably banks and insurance companies either newly established or through acquisition of interest in existing businesses.  Jump to late 2003 and the country was gripped by a banking crisis which, if the Reserve Bank is to be believed, was engineered by these very founders. Despite this many of the founders continued to head their institutions, even if it meant attempting to do so from outside the country after evading arrest. Others survived or defied board attempts to remove them or get them to relinquish their shares eventually leaving on their own terms. Some, like William Nyemba of Trust Bank and Mthuli Ncube of Barbican Bank were not so lucky, they had their banks seized and closed respectively by the Reserve Bank. James Mushore who co-founded NMBZ in 1993 fled the country to avoid imminent arrest in 2004 to only return six years later and later left the bank in 2014. In 2015 he joined the board of Meikles Africa in 2015, they have an interesting way of explaining his time away from 2004 to 2010.

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Who’s company is it anyway?

This resistance to succession is so entrenched in Zimbabwe you will find it in just about any sector. John Moxon, Executive Chairman of Meikles is embroiled in a years long battle to topple him having joined in 1970 and been on various Meikles boards since 1980. Anthony Mandiwanza has been Group Chief Executive at Dairibord for almost 20 years and joined the company in 1980, oddly enough none of this information is on the Dairibord site. Retired Justice Leslie Smith has been Chairman of the National Blood Service Zimbabwe, NBSZ, since 1977.  Michael Fowler and Zed Koudounaris are a founding shareholders of Innscor and have featured on the board in various roles, they are currently non-executive directors.

Drill down to management in corporate Zimbabwe and you will likely find this resistance is rife. With limited opportunities for upward mobility and the dire consequences of unemployment in a failing economy, people will do all they can to hold onto their positions for as long as they can. Even with companies struggling to pay salaries on time, sometimes not at all, employees hold onto their jobs regardless.

What’s good for the party is good for the board.

This economic liberation of the eighties and nineties is devouring the children of two generations and eyeing a third. We routinely berate political parties for not having clear succession plans but the best laid plans of politicians will come to nothing if there is no succession in the economy. It is sheer suicide to wait for the current executive to die off in the hope that this will finally present an opportunity for new blood.

“The tree of liberty must be refreshed from time to time with the blood of patriots and tyrants. It is its natural manure,” Thomas Jefferson November 13, 1787. 

In Part 2 next week I will look at the economic distortions in Zimbabwe as a consequence of of this culture of holding on as the economy has contracted, what this means for Zimbabwe’s recovery and possible solutions.

***

Based in Johannesburg South Africa, Ricky Marima is a recovering economist and twenty year veteran of building businesses across a variety of industries. He currently works at knowledge startup RemNes where he guides clients across the continent to ask the right questions about the 4th Industrial Revolution. You can reach him on ricky@remnes.com

 

 

We Don’t Need Another Hero.

it’s been a phenomenal two weeks in the country of my birth, Zimbabwe. The events of the last fourteen days across the country have caught everyone unawares. From the initial demonstrations at Beitbridge border post on June 20th when SI 64 was first implemented to the burning of the customs warehouse and closure of the Zimbabwe and South Africa border for the first time in over a century, media and government were at a loss to explain what had changed in the mood of the country. Little did they know more was to come.

Hardly two days after relative order was restored at Beitbridge, Monday saw running battles between police and Kombi drivers across parts of Harare as the latter went on strike in protest against traffic police corruption. Police deployed their standard tactics only to be met by an emboldened resistance that saw reports of them being beaten back by enraged protestors. As the day went on pictures emerged of excessive police force along with increasingly violent resistance.

In response to the burning of the Beitbridge customs warehouse, Minister of State Security Kembo Mohadi, who is from Beitbridge, exclaimed:

“We are very much disturbed. Why should the South African businesspeople try to influence our policy formulation? They have their own laws and we don’t meddle. It is sad that they chose to mobilise our people against the Government. The burning of tyres during demonstrations is foreign to us and we suspect a third hand is involved in the chaos that rocked Beitbridge town on Friday,” 

Mohadi also blamed the police for being unprepared leading to the army having to be called in. The police, for their part, have been consistent in  cracking down viciously at any sign of protest but have at times appeared at a loss when confronted by protestors who are not scared of them anymore. Instead, they have now started to look for the ringleaders of these protests, another old policing tactic.

Now whilst the police and government try to get control of the situation the media have been excitedly keeping the world informed and as is their nature, trying to find that unique angle to differentiate their coverage from that of the competition. The irony is, many are as confused about this new wave of resistance as the state, and like the state, have resorted to classic theories to explain what is going on. In this effort, they have identified an ideal leader who fits the desired profile in a Harare pastor, Evan Mawarire.

Mawarire has risen to prominence over the last few months after a series of Facebook videos of him venting his frustration at the state of the country resonated with fellow Zimbabweans inspiring others to share their stories of frustration. His use of social media to galvanise people has been nothing short of phenomenal and he has attracted other equally talented and frustrated Zimbabweans to his cause under what has come to be known as the #ThisFlag citizens movement. Collectively they called for a stay-away on Wednesday 06 July which saw the country come to a virtual standstill and protestors in running battles with the police in Harare and Bulawayo. Following on this they have published a list of demands and are threatening a second stay-away next week.

#ThisFlag is now the ideal one-stop-shop for publishers looking for a ready-made media package for anyone wanting to know what’s going on in Zimbabwe today and its all here on social media, or so some local and international media would have us believe. It is at this point that I become wary. The last week has seen all sorts of people claiming credit or being assigned blame for what has in reality been a collective effort who’s time has come. The MDC-T’s Obert Gutu was quick off the mark after Wednesday’s stay-away to claim that this was only possible because of them, an act that was roundly condemned across social, digital and print media.

Now that the dust has settled, the state and media alike, are looking for ringleaders of the protests, albeit for different reasons. The state so they can put an end to the protests, the media so they can find new heroes and villains to replace the tired characters of the seemingly eternal Zimbabwean political soap opera. Why shouldn’t they? This formula has worked marvellously for both of them in the past. Only problem is, this time around what’s happening in Zimbabwe does not fit this mould. This is popular resistance against a political system that has failed Zimbabweans for too long and now seeks to starve them. I don’t know where started but it certainly was not on social media and it certainly was not on July 01, Zimbabweans have been frustrated a damn long time and have been using various means to just get by in spite of a state that has continued to make life harder for them.

Recent moves by the state, notably the introduction of bond notes and S I 64 have been the most brazen of a number of unpopular moves going back as far as 2000 or even 1980, depending on who you speak to. All these own goals have seen Zimbabweans from all walks of life saying they have had enough, from advocates to vendors to taxi-drivers to pastors to journalists to students. Every Zimbabwean who is not benefiting directly from the patronage system that is our government today has had enough and are finding means of expression, no matter where they are. In Bulawayo youths who I saw growing up were arrested for demanding Mugabe must go on Wednesday, they are out on $40 bail each. A few weeks ago a woman wrote of how she lost her child to an inept health care system. Two people who have been creating platforms for Zimbabweans to communicate with and develop each other tweeted about how they were interviewed by the police about their activities in the same week. People are sharing their dissatisfaction with the state and they all need to be heard, to position some as heroes this early in the night is to set us all up for failure. We are all important and we all deserve support.

The world wants to tell us social media has become a new frontier in the battle for a normal life in Zimbabwe and in response the state has threatened to control social media, even allegedly disrupting the internet during Wednesday’s stay-away. Barring social media or the internet entirely will not put food in peoples’ bellies or bring back lost children. It won’t restore the tens of thousands of jobs lost annually, let alone the millions ZANU promised during the 2013 elections. Employees are only as loyal as their last paycheque and in Zimbabwe regular paycheques have become increasingly rare. As the state & media look for heroes and villains a country demands a return to normalcy so they don’t have to ever again read in a WhatsApp message about a relative dying in a hospital because there was no water.

We don’t need another hero in Zimbabwe, our history is riddled with them and since 1980 their legacies have been used to control and cajole us. We need all our stories to be told and a responsible government that values the life of every citizen.

Do Zimbabweans Really Speak So Well?

In 1986 I was a ten year old boy going on eleven doing grade 6 at a highly rated government school in Bulawayo. One day our teacher, Mr. Lewis, a Welshman, says to me “You speak so well that if I was to close my eyes I would think I was listening to a white boy”. I was so pleased with myself I went home beaming and couldn’t wait to tell my parents about this amazing compliment Mr. Lewis had paid me. I cannot remember my mother’s reaction but my father said dryly, “and you think that is something to be proud of?” I was ten, what did I know? That day marked me for the rest of my life and informed my interest in history and how we Zimbabweans came to speak English to begin with.
I was reminded of that day when recently on Twitter I got into a debate with someone who believes Zimbabweans are superior to other Africans, especially Nigerians, because we speak English so well. Now it is one thing to think you are highly proficient in a particular language but it is totally another to laude this proficiency over others when the language in question is the result of colonial conquest and was forced upon your ancestors just as it was upon countless millions around the world. Can one really say they are superior because they have more fully adapted the ways and graces of those who formerly oppressed them?

Now don’t get me wrong, I fully understand the functionality of English as a medium in the world that we live in but I am also acutely aware of the way it has been used in the past and even today to obliterate indigenous culture, religion and thought. It is for these reasons that I see no reason for someone who is descendent from these obliterated cultures to celebrate their proficiency in English AND laude it over others who share the same scars of having their history robbed from them. I just don’t get it.

The discussions went on all day with many Zimbabweans telling the author of the claim that he was wrong in his assertions but he stubbornly held on. The low-point for me was when he responded to those who didn’t agree with him by tweeting “this isn’t going to expand anything. A lot of you are being primitive on here.” I was left wondering, if this was just his arrogance, ignorance or something worse. Had the black self-hate I read about online manifested itself in this young person? Did he really believe that his affinity to whiteness made him better than other black people? Was he really telling me of all the traits and talents he had developed, speaking English well was the one he prized most? If so, was he the only one? Soon enough others came out in support of this position but none with such fervour and commitment as he who started it all. He was unapologetic, as a Zimbabwean, he was proud to speak English so well and other Africans should just deal with the fact that we are just better at it.

Interestingly enough, at least two Nigerians contested this saying their English accent was better than that of Zimbabweans whilst a number of southern Africans, particularly South Africans, were insulted and none too polite in their responses. What this did show me though, was that the majority of interactions were united in their rejection of using English proficiency as a yardstick for superiority, in fact, they rejected the entire notion of one African being superior to another. This something that I take to heart because I have never understood the zeal with which our governments attempt to outdo each other in whatever ranking comes out of whatever organisation that claims to have authority of whatever sort. One that particularly bothers me is the manufactured fight between South Africa and Nigeria to be Africa’s biggest economy. As a collective we would be so much better off if we looked to the least developed countries on the continent and together worked to uplifting them out of that dire situation, but I digress.

The British were very good, no, uniquely excellent in spreading their language and culture across the world as part and parcel of their brand of global conquest for over six hundred years. It is wishful thinking to imagine we can erase that legacy in Zimbabwean minds in two generations but one hopes that with each generation this influence is tempered by our rediscovery of ourselves as a people with a past, present and future that is not dependent on affinity to the so-called global standard of doing things. As Zimbabweans, we need not speak so well to get ahead.

N.B. This post first appeared in Her Zimbabwe.

Of Carts And Donkeys: Why it is wrong to think exports will restore and sustain Zimbabwe’s economy.

Unlike the chicken and egg riddle, in economics, there is no question that a strong domestic economy is always the basis from which strong exports are built. This is why it remains a wonder to me that every other day there is talk of how Zimbabwe’s exporters need to ramp up production and take advantage of international markets. At the same time the Minister of Trade and Industry, Mike Bimha, is telling any foreigner who will listen that Zimbabwe is open for business with a vibrant domestic market. A few weeks ago Minister Bimha reportedly went as far as to invite a South African business delegation to take advantage of the current jobs bloodbath and set up shop in Zimbabwe because local industry is practically stalled. So local producers must export whilst the domestic market is serviced by foreign firms who come in and produce? How does this work? This is the same thinking with the Look East policy that has seen Chinese firms benefiting from generous investment initiatives going back at least a decade with no reciprocation. It is now clear there was never any incentive for the Chinese to do so to begin with because Zimbabwe did not negotiate a trade deal, they simply gave the family jewels away.

What Zimbabwe needs to do is focus on deepening the local economy, a Marshall Plan, if you will. The first step is to restore trust in the government, nobody puts in a country where those who run it cannot be trusted to honour their commitments unless they themselves are not trustworthy. Next would be to restore local industrial capacity to supply the domestic market by investing in base infrastructure such as roads, rail, electricity, education, telecommunications, health and housing. This can only be done once Zimbabwe becomes a viable investment destination, a factor largely determined by the level of government’s trustworthiness. For too long Zimbabwe has tried to sell itself as primarily a source of raw materials and a conduit to the continent with the domestic economy treated as ancillary to that. The central location of Zimbabwe previously made it ideal for channeling southern and central Africa’s produce to the ports of South Africa and Mozambique and imports up north. Any benefit falling to the local economy was more of mere consequence rather than actual intent. This is Zimbabwe’s colonial legacy, it is still strong and highly evident in the trade language of today’s government. But there is hope.

It is notable that barely days after President Mugabe gave his surprisingly brief State Of The Nation Address parliament is seized with passing a raft of laws aimed at creating a more investment friendly environment. Needless to say, last week’s visit by Nigerian businessman Aliko Dangote and the announcement of his intent to invest in Zimbabwe could not be coincidental. This has been borne out in various news stories of the behind the scenes negotiations culminating in last Monday’s whirlwind visit. The local broadcaster had hardly scrambled together their usual analysts and Dangote had already left Harare. Since then cabinet has approved all of Dangote’s projects, though I am not sure what that means as no plans have yet been presented to them, let alone drawn up. Meanwhile the Zimbabwe Investment Authority’s Nigel Chanakira has said they will not be found wanting when the time for issuing all necessary investment permits comes.

Whist I have many questions about what this deal means for how Zimbabwe conducts business I am cautiously optimistic. I am hoping government may just have finally painted themselves into a corner such that they have no room to mess this up as they have done countless times before. Another reason to like this deal is that it is totally about local capacity building to cater for Zimbabweans. The coal will be mined locally for domestic power generation to feed a cement plant that will primarily supply the local market. It is now to wait and see how local businesses are going to compliment these developments and thus deepen the economic multiplier effect.

This is what it means to put the domestic economy first. It is not prone to the whims of export markets and fancies of international commodity brokers. The more integrated the domestic economy, the better it will carry a country through any international crises. It is the donkey that will pull the proverbial cart and it must be fed. If such efforts can be replicated across other industrial sectors over the next ten years there is hope yet to see a Zimbabwe restored to it’s rightful economic status in our lifetime.

Zimbabwe Sees Boost In Regional Exports

Today the world woke up to the news that Zimbabwe has become a regional powerhouse in an unexpected field, load shedding. Whilst it is widely known that Zimbabwe has struggled with power generation for a number of years, it has only recently come to light that Africa’s most literate country has turned this national lemon into the proverbial lemonade.

Following a state visit to South Africa in April this year by President Mugabe, South Africa and Zimbabwe signed a variety of trade pacts. It is believed amongst these was a commitment by South Africa to increase it’s imports of load shedding from Zimbabwe by 500% phased in over 3 years to allow Zimbabwe to ramp up production. South Africa is believed to have wanted an exclusive deal but Zimbabwe resisted this siting her positions as chair of both SADC and the AU. Zimbabwe trade negotiators felt this resource must be shared with all of Africa. Unofficial sources have stated that load shedding exports to South Africa could be the economic panacea that Zimbabwe has been looking for after a similar deal with Nigeria fell through.

Zimbabwe is also a major global exporter of skilled and unskilled labour with South Africa being a major market. It is possibly the runaway success of this trade that swayed the Zuma presidency to conclude the mammoth load shedding deal.

Zimbabwe will also be ramping up exports of specialist financial services to South Africa and the greater SADC community, chief among them, currency devaluation and inflation fuelling. Early gains have already been recorded in South Africa with the ZAR now at near record levels to the currencies of western imperialist states. Inflation however, has proved to be rather stubborn and a specialist team has been seconded to Finance Minister NhlaNhla Nene from Zimbabwe’s Ministry of Finance as a matter of urgency.
Other areas where Zimbabwe has provided services to South Africa include:
Service non-delivery
Ghost worker deployment
Legislative bungling
National debt maximisation
Government Accountability reduction measures

As part of a cultural aspect Zimbabwe will also be deploying experts in historical revisionism to ensure the struggle against apartheid is forever remembered as it should be.