BSR: The train has gone off-track


When Emmerson Mnangagwa usurped power following the military coup in November 2017, international re-engagement became one of his flagship policies. He was keenly aware of Zimbabwe’s pariah status in the previous two decades under his predecessor, Robert Mugabe. He knew that the resuscitation of Zimbabwe’s comatose economy hung on unlocking the doors to international re-engagement.

He signalled an intention to change course and rebuild relations with the West. The re-engagement strategy would be on two fronts: political and economic. The political would entail restoring cordiality with the West while the economy would include a settlement with Western creditors to whom huge arrears were owed by Zimbabwe. But armed with this knowledge, and with all the goodwill in the world, Mnangagwa inexplicably plunged the ship into an iceberg.

The season following the coup could not have been more plentiful for Mnangagwa in terms of goodwill. Despite misgivings over the coup, many in the country and around the world were prepared to give him a chance. He was one of the most sought-after guests at the World Economic Forum in Davos in January 2018, just weeks after the coup. Aware of the embarrassment of calling it a coup, many in the media and diplomatic circles resorted to referring to it as a “military-assisted transition”. It’s a measure of how he much he has disappointed former supporters that even those who hesitated in the beginning now openly call it a coup.

Few men in the course of human history have spurned a golden opportunity the way Mnangagwa did. The current decrepit state of Zimbabwe reflects an abject failure to take advantage of the opportunities that existed after the coup. It is fair to say that his foreign policy of re-engagement has so far failed to pay dividends. The last two weeks have shown that there has been no progress in Zimbabwe’s relations with the West, despite the Mnangagwa regime spending millions of dollars paying lobbyists. There is a lesson to be learnt: it’s not just a public relations campaign that will turn heads; the regime must attend to real and demonstrable reforms.

The economic train has derailed

Last week, the IMF issued a damning verdict on Zimbabwe’s reforms which it described as having gone “off-track” suggesting that the country has lost direction. The IMF cited weaknesses in policy implementation as one of the causes of the derailment. With a background in the world of international financial organisations, Zimbabwe’s Finance Minister, Mthuli Ncube is familiar with governance indicators. Indeed, he has shown keenness for approval and validation from generators of indicators. It must, therefore, have been disheartening for him to read the IMF’s damning Article IV report.

Ncube has dabbled in currency reforms, trying to revive the Zimbabwe Dollar which became moribund in 2009 on account of record hyperinflation. While acknowledging the introduction of a new currency as a significant development, the IMF noted in its report that the Zimbabwe Dollar had failed to hold its value against the US Dollar. It’s not long ago that the government insisted that its surrogate currency was equal to the US dollar on a 1:1 basis. The situation changed in February 2019, when the government lightly loosened the exchange control rate at the surrogate currency traded at 1:2.5 to the US dollar. A year later, the official exchange rate stands at 1:18 while the unofficial rate on the parallel market is nearly double at 1:34.

The steep decline demonstrates a crisis of confidence in the new currency, but this was predictable, and the government was warned from the beginning. The IMF blames “uneven implementation of reforms, notably delays and missteps in FX and monetary reforms”. The IMF believes these failings, “have failed to restore confidence in the new currency.”

All this is not new. It is trite that the value of money depends on how much the next person is willing to accept it in exchange for goods and services. When a significant number of users start doubting the value of a currency, it loses value and if the doubt grows into rejection, the currency becomes moribund. This is what happened to the old Zimbabwe dollar which the market abandoned in 2008. The IMF has emphasised the need to establish credibility in the new currency. However, given the rate at which it is declining, this increasingly looks like a lost cause.

The government itself is not helping the cause of the Zimbabwe dollar, with its piece-meal measures detracting from rather than supporting it. A couple of weeks ago, fuel companies began selling fuel in foreign currency at selected fuel stations with the central bank’s authority. The so-called Direct Fuel Imports (DFI) fuel stations are meant for fuel that is imported directly by fuel companies using their “free funds”. The government still allocates cheap foreign currency for the importation of fuel. This foreign currency is allocated at the Interbank exchange rate of 1:18. This situation presents an opportunity for manipulation. It is not clear that the government has robust systems to monitor that fuel companies do not take advantage of the cheap foreign currency allocations to import fuel which is then sold in foreign currency at DFI stations.

Another currency decree

This week, the government has issued yet another currency-related decree. Statutory Instrument 61 of 2020 authorises the government to charge a fee in foreign currency for the issuance of emergency passports. A previous decree, Statutory Instrument 212 of 2019 set out rules for the exclusive use of the Zimbabwe Dollar in all domestic transactions. Only a few transactions had been excluded from this regime of exclusivity of the Zimbabwe dollar. Now anyone who wants an emergency passport will be charged in foreign currency.

This is yet another step in the incremental decline of the Zimbabwe dollar as its zone of exclusivity is eroded. After fuel and passports, there will be more exemptions from using the Zimbabwe dollar, especially in transactions that involve the government. This is primarily because the government is in desperate need for foreign currency. But this has a devastating impact on the already stressed local currency. Seeing the government shunning the Zimbabwe dollar will only fortify the market’s belief that even the owners of the currency no longer have confidence in it. In any event, the informal market, which is now dominating the economy, is already shunning the beleaguered Zimbabwe dollar.

Refuge in the stock market

Another sign of the waning confidence in the local currency is the stock market. Recent reports showed a surge in the stock market, which was interpreted as investors seeking refuge in the stock market. Apart from being an instrument of exchange, currency is also a store of value. When a currency is depreciating in high inflationary times, it ceases to be a good store of value. People try to find alternative stores of value. They might buy a property. Some go to the parallel market to buy US dollars because they are a better store of value. They might prefer shares on the stock market, gambling that shares are a better store of value than the currency.

It goes without saying that to get out of its predicament, Zimbabwe needs external support. However, standing in the way of potential support from international financial institutions and creditors is the huge arrears the country owes. As stated in the IMF report, “Zimbabwe remains in debt distress, with large external arrears to official creditors, and encouraged the authorities to give impetus to re-engagement efforts and debt management and transparency”.

The country’s failure to settle the debt problem is connected to the failure of political re-engagement. This point is evident in the same IMF report which says the government has failed not only “to define the modalities and financing to clear arrears to the World Bank and other multilateral institutions” but also “to undertake reforms that would facilitate the resolution of arrears with bilateral creditors”. This, according to the report, “continues to constrain Zimbabwe’s access to external official support.”

What should the government do to enhance the prospects of re-engagement?

The IMF “stressed the need to address governance and corruption challenges, entrenched vested interests, and enforcement of the rule of law to improve the business climate …” This is a polite and diplomatic way to emphasise the need for serious political and economic reforms. It has long been known that Zimbabwe’s problems are rooted in its corrupt political system.The reference to “entrenched vested interests” is a euphemism for the cartels of corruption which are led by or connected to political elites within the regime. These cartels have captured both the government and the ruling party.

The government has so far failed to address the problem of corruption despite having the institutions and laws in place. They are simply not performing their mandate. Institutions like the Zimbabwe Anti-Corruption Commission are big on talk and promises but they have no results to justify their existence. Mnangagwa fired a Prosecutor General and previous commissioners of ZACC because in his view they were not producing results. However, his appointees have performed no better than the old lot.

A ship without a captain

Barely a week after the highly critical IMF report, the US announced a renewal of the Executive Order in terms of which individuals and entities are subject to targeted sanctions by the Us government. These targeted measures have been in place since 2003 and have been renewed annually ever since. The Zimbabwean government has invested a lot of money paying lobbyists in Washington D.C. in efforts to get the targeted sanctions removed. It has also spent money in across Africa seeking support from peers and regional organisations like SADC and the AU. The millions have not yielded dividends. Zimbabwe doesn’t have to spend all this money on wealthy lobbyists. It simply needs to carry out political reforms.

What was quite fascinating, however, was the reaction of the government to the White House announcement. The government issues two statements, one from the Ministry of Information and Publicity and another from the Ministry of Foreign Affairs and International Trade. Why would the same government issue two separate press statements from two different ministries?

In some ways, it is a reflection of a disorganised government which is lacking leadership. A Ministry of Information and Publicity is essentially a creature of authoritarian regimes designed to generate and distribute propaganda from a centralised platform. The Mugabe regime made effective use of this propaganda machine because that is precisely what it was meant to be. The rest of the ministries kept a quieter profile and government communications came through the information ministry. It was tough and vitriolic in its propaganda function but at least you knew what the government was thinking and saying because it came from one source.

The Mnangagwa regime is struggling to handle communications but this largely because the captain does not have a clear model and his lieutenants are groping in the dark. The regime wants to maintain the old-style propaganda ministry but at the same time, the individual ministries want to handle their departmental communications on issues that concern them. This is producing a clash between the central communications at the information ministry and the decentralised communications at ministries. In this case, the information ministry wants to continue in propaganda mode – using raw bluster and talking tough, while the foreign affairs ministry wants to engage in more nuanced diplomacy.

The result is what we have seen this week: two statements on the same day from the same government but with different styles, tones and messages. The statement issued by the Information Ministry was defensive but quarrelsome, aggressive and belligerent in its tone. The statement by the Foreign Affairs Ministry was equally defensive but it was more measured, explanatory and seeking to be understood in its tone and content.

It does not go without notice that the statement from the Information Ministry was written by the Permanent Secretary, Nick Mangwana, whereas the statement from Foreign Affairs was signed off by the Minister, Lt. General (Rtd) Sibusiso Moyo. In terms of timing, the Minister’s statement came after the Permanent Secretary’s statement. Both in terms of timing and hierarchy, the statements have the appearance of the diplomats intervening to correct the hasty hand of the political activists at the propaganda ministry. It reads like a rebuke by foreign relations specialists unamused by the reckless hand of an unqualified subordinate.

Certainly, the Information Ministry’s statement was ill-advised and lacked tact. The propagandists tried unwisely to deny the undeniable, and in the process left the government looking ridiculous. By contrast, Moyo’s statement tactfully steered clear of specifics because the author knew how stupid the government would look if it tried to make specific denials. For example, Mangwana wrote,

“The Government of Zimbabwe strongly objects to the unfounded assertion that its security forces engaged in acts of extrajudicial killings and rape against its own citizens in the last year. Any acts of criminality by anyone are subjected to the criminal processes of the country”.

This was completely absurd and disingenuous because the whole world knows that there have been two incidents of extrajudicial killings by members of the security forces under this regime – 1 August 2018 and January 2019. A commission of inquiry set up by the regime and headed by former South African President Kgalema Motlanthe found that members of the military and police were responsible for the killings in August. Yet there has been no single prosecution of perpetrators. It was not clever, therefore, for Mangwana to make those blatant denials in the face of clear evidence to the contrary.

By contrast, Moyo avoided being drawn to specifics. It was unwise to deny extrajudicial killings. Instead, he tried to communicate positively, by compiling a list of positives that he believes the government has done by way of reform. The statement had substance, albeit contestable, but it was different from the earlier statement which was full of rhetoric and empty bluster. Both were overly defensive but Moyo’s statement was written in a tone that begged understanding whereas Mangwana’s statement was accusatory and quarrelsome.

The likelihood is that Moyo’s statement was outsourced and written by a professional who has an appreciation of diplomacy in inter-state communications whereas Mangwana’s statement was written by political activists in propaganda mode. Like the proverbial man armed with a hammer for whom every problem is a nail, propagandists are used to attacking without nuance. Moyo knows there is no benefit to a scorched earth policy and that he must keep building the broken bridge but the old-style propagandists only know how to shout back.

That the government issued two statements on the same issue and on the same day is bad enough in terms of communication. That the statements were different in tone and content suggests confusion and turf wars in a ship whose captain is sleeping on duty. No wonder one statement suggested that the government was “baffled” by the renewal of sanctions while the other claimed it was not surprised.

The incident underscores the outdatedness of the information ministry. The diplomats can speak for themselves, as can all the bureaucrats at ministries. The information ministry cannot and should not be speaking on specialised subjects such as diplomacy and economics that fall within the remit of specific ministries. Ideally, the information ministry should be relocated to the presidency where it deals with affairs of that office as one of its departments. It is a relic from old-style authoritarian politics and has no space in a progressive and open democracy.

Senator has the last laugh

The Senate does not attract as much attention or headlines as does the National Assembly. Some regard it rather uncharitably as a retirement home for the older generation of politicians. This image has much to do with its historical origins as with the minimum age requirement for a seat in the Senate which is set at 40 years old. Also, getting a seat in the Senate is not as competitive as earning a seat in the National Assembly. It’s a dog-eat-dog fight for a National Assembly seat where seats are won on a first-past-the-post basis whereas senate seats are allocated based on proportional representation.

Despite its low profile, debates in the Senate are worth paying attention. This week, the Senate witnessed a brief but fascinating exchange between a veteran MDC Senator, Morgan Femai and the President of the Senate. Senator Femai addressed the House in the vernacular Shona language and below is a loose translation of his contribution.

“Thank you, President. My question was directed at the Leader of the House, but I think they can still answer the question. The issue concerns the government’s policy. What is the government’s policy concerning a Cabinet Minister who is failing to perform to expectation? Is it true that they are fired? If it is true that they are fired when will [Finance Minister] Mthuli Ncube be fired?”

The question drew a mixture of applause, murmurs and gasps across the chamber probably because it caught everyone unawares in an environment that is accustomed to somnolence.

“Honourable Femai,” said the acting President of the Senate, repeating the veteran Senator’s name twice in a headmasterly fashion which suggested that a rebuke was about to be unleashed. That condemnation promptly arrived. “That is very unparliamentary, unprofessional and uncalled for!” said the acting Senate President.

After a momentary pause, intended to ensure that his words achieved maximum effect, the acting Senate President ordered a prompt retraction of the question. “Withdraw that!”, he demanded, clearly unamused by Senator Femai’s inquiry.

Senator Femai hunched over the desk in the manner of an impish schoolboy who has just been told off by the headmaster and conceded, with a hint of mischief in his manner, “I’m sorry Mr President, I withdraw”.

The exchange brought memories of a famous encounter between the late veteran politician, Edison Zvobgo and a Speaker of Parliament some years ago. That exchange has become the stuff of parliamentary legend. Zvobgo had reportedly said during a parliamentary debate, “Mr Speaker Sir, half the people in this August House are stupid”. Unamused by the comment, the Speaker asked Zvobgo to withdraw his statement. “That is very offensive, and I think you should withdraw your words, Honourable,” said the Speaker.

Zvobgo duly obliged, but not even the Speaker would have been prepared for what was to come. “I stand guided, Mr Speaker,” Zvobgo said, “and I would like to withdraw my words and rephrase.” Then he unleashed the memorable line. “Mr Speaker, half the people in this August House are not stupid”. It was hard not to admire the stinging wit in that delivery.

Senator Femai’s retraction may not have been blessed with the sharp wit of Zvobgo in that memorable episode, the veteran legislator would have been satisfied that he had achieved his purpose. It was plain from his demeanour that his apology and retraction was on account of duty, and that neither originated from the heart. He had not asked the question in expectation of an honest response. It was a rhetoric question. The veteran Senator simply intended to deliver a message that many frustrated Zimbabweans have been saying outside Parliament, namely that the Finance Minister and his appointing authority have failed and both must take responsibility.

But Senator Femai would not have anticipated that the acting President of the Senate would concede an additional bonus. By taking offence and rebuking the veteran Senator for asking a simple question that would be regarded as normal in any decent democracy, the acting head of the Senate had demonstrated a high level of pettiness, infantile behaviour and intolerance that is usually associated with banana republics. There was nothing “unparliamentary” or “unprofessional” about Senator Femai’s question. He asked, in the language of an ordinary person, a question that any self-respecting representative of the people in a democracy should be asking. He was just doing his job.

In the end, the acting head of the Senate had succeeded in embarrassing himself and the regime that he represents. While Senator Femai had been ordered to retract, it was he who walked away with the proverbial last laugh, having delivered a hard blow that drew the worst instincts of an authoritarian regime: anger, intolerance and silencing questioning voices. All this in a place that is supposed to be the theatre of democracy, free speech and accountability.