Then there are the economic realities, the Zanu PF manifesto – indigenisation, empowerment and jobs are directly in conflict with each other – if they follow through on their indigenisation programme, capital flight will continue, new investment will dry up and existing business will hold back on everything, including maintenance. Morgan Tsvangirai said they can rig the elections, but they cannot rig the economy and already the markets are punishing them. Cash has drained away from the banks leaving many in dire straights and the economy is again going underground.
The announcement that people need not pay their accounts to local authorities has shrunk inflows of revenue – in some cases by two thirds, overall by half. Councils are unable to pay salaries and to crown it all, the national coffers are empty and the government has, for the first time since 2009, missed a payroll.
Some two months ago, after three years of intense negotiation, the process of reengagement with the multilateral financial institutions started with the President signing the agreements that initiated a Staff Monitored Programme with the IMF. If successful this would have resulted in debt relief for some $13 billion in long overdue debt, a resumption of lending on a concessionary basis by the Funds and the resumption of ability to borrow on global markets.
But the programme lays down stringent and detailed prescriptions for economic management. It commits the State to greater transparency in all its dealings, strict monetary and fiscal discipline and limits on expenditure on major items such as the salaries of the Civil Service. Step out of line and the penalties will be immediate – especially since the major powers in the IMF and World Bank are the same countries that are maintaining political restrictions on Zanu PF leadership and are deeply disappointed in the failure of regional leaders to contain the excesses of the old regime; especially the failure of the whole GPA exercise to deliver a credible democratic transition in leadership.
So the Zanu PF leadership finds itself on very thin ice and if they make one wrong step, they will break through and freeze to death. They simply cannot make good on their promises to pay higher salaries to Government workers and the armed forces, they cannot improve allowances and pensions to war veterans. They have to resume debt collection with tough penalties and they have to persuade a skeptical business world that there is life after the elections and under Zanu PF leadership.
That is a tough call – on the front page of the Daily News today is a photo gallery of the panel of candidates for the Cabinet – every one of them shouting out loud, “here we are, the team that gave you 231 million per cent inflation in 2008, the team that destroyed the economy and wiped out the accumulated cash savings of a century of hard work and enterprise. The team that collapsed the education and health system – halved our life expectancy and brought us the highest infant and maternal mortality in the world. This is the team that tripled our death rate and drove a third of our population into exile.”
These are the characters that before the GNU took their human rights away from them, looted the Reserve Bank of at least $1,3 billion a year, Noczim of $150 million a year and stole $3,4 billion from NSSA over the preceding two decades. These are the very people who took probably the most advanced agricultural system in the third world and smashed it to pieces in a few years; in the process looting billions of dollars in private and corporate assets in total disregard to their own laws and the basic rights of the investors, most of whom lost everything they owned.
Can we really think that this motley crew, who has just pulled off one of the greatest electoral heists in history, will keep their hands out of the till, obey the rule of law and stick to signed agreements? Hardly and until they demonstrate otherwise they have to contend with a hostile global environment of their own making, a totally skeptical business community and a system of economic justice that will punish them instantly whenever they break the rules. It’s scary.
Already traders are holding back on credit lines to local retailers, wholesalers and distributors. Our imports run to $600 million a month and there is a gap between imports and export earnings of about $3 billion per annum. Much of this is funded by inflows and remittances but companies provide local business with informal lines of credit that keep our markets supplied with product. They do so because they trust their local buyers and those buyers have been able to pay on time and in full on a regular basis. Any talk of a resumption of the old fiscal and monetary regime and these lines of credit will vanish and Zimbabweans will be back in perpetual fuel and food queues; back to buying bread in Botswana, good for Francistown, bad for Zanu (PF).Post published in: News