Crunch time for Mugabe and Zanu-PF
In the run-up to last year's elections President Robert Mugabe and Zanu-PF promised milk and honey would flow in Zimbabwe again; the party promised to create $7.3-billion through the indigenisation programme, grow the economy by an average of 7.7% a year and garner 2.2-million jobs by 2018.
Social services delivery would also improve, with the nation assured that government would prioritise infrastructural development. And at his inauguration on August 22, Mugabe said he would somehow turn the economy around and deliver on his electoral promises.
But nine months after the election, Mugabe's promises are coming back to haunt him. The economy has slowed down and the crisis is compounded by a severe liquidity crunch that is causing company closures and job losses.
Service delivery is not doing any better, with Zimbabweans in urban areas experiencing longer hours of power cuts and going for days without running water. Local authorities are also struggling to collect refuse.
Job losses, retrenchments
A survey by the Zimbabwe Congress of Trade Unions (ZCTU) revealed that at least 9 617 workers lost their jobs at the beginning of the year after 75 companies failed to reopen after their annual year-end shutdowns.
In November, the ZCTU revealed that an average of 300 workers were being retrenched weekly, with most companies citing the liquidity crunch as the reason.
Zanu-PF spokesperson Rugare Gumbo acknowledged that events had not gone as planned but insisted the party was confident of achieving its electoral promises. These have been adopted by the state and enunciated in the Zimbabwe Agenda for Sustainable Socio-Economic Transformation (Zim Asset) – the government's economic blueprint until 2018.
"Of course we will achieve our electoral promises; that is the direction we are taking," Gumbo told the Mail & Guardian this week.
"I admit we have not moved as fast as we would have liked, but the problems we are facing are temporary and they will pass ... I believe that, once the party's policies and programmes are running at full throttle, we will overcome the challenges."
Gumbo said the government was making changes in the mining sector and other sectors that would be key to the country's economic revival.
Serious paradigm shift needed
Economic analysts, though, believe Zanu-PF can only turn the economy around if it makes a serious paradigm shift.
"Unless there is a change of template, then the projections will remain an unrealistic dream," said Godfrey Kanyenze, director of the Labour and Economic Development Research Institute of Zimbabwe.
"They are still fighting the European Union and everyone else instead of engaging. When you are facing a liquidity crunch like ours you need to engage and attract foreign direct investment. They need to deal with corruption as a matter of urgency and pull together as a government, because it appears there is too much factional fighting and disunity.
"As it is, it appears as though the dragon slayer has stumbled on its sword. They promised to slay the dragon of unemployment and the dragon of company closures but they are losing the battle."
Kanyenze said the fact that the government was struggling to pay its own workers was a reflection of the serious crisis in the country.
Another economic analyst, Eric Bloch, said Zimbabwe should modify its indigenisation laws to attract investment and thereby create jobs.
"Investors are not prepared to pump in money so that they have a 49% stake and have no say in how a company will run. They are not prepared to have shareholders imposed on them. We need to get away from the thinking that, because we own 100% of the natural resources, we should control everything. We need capital injection and access to technology," he said.
Bloch said agriculture was also key to the economic revival and that the Zanu-PF government should give collateral value to the land that farmers own so that they can access finance.
"We also need to apply for relief under the Heavily Indebted Poor Countries programme so that the debts are progressively relieved. But for this we should be prepared to re-engage the international community," he said.
Under the Heavily Indebted Poor Countries programme, the World Bank and IMF conditionally reduce interest on loans or cancel debts that a poor country cannot repay.
"There is a need to privatise or partially privatise our essential parastatals such as the National Railways of Zimbabwe and Zimbabwe Electricity Supply Authority. The government does not have money to revive the parastatals and the parastatals do not have [the required] up-to-date technology to thrive," he said.
Economic analyst John Robertson said it was unrealistic for Zanu-PF to think it could create $7.3-billion through the indigenisation programme.
"The value created through indigenisation has no cash value, but it has value on the stock exchange. That money does not exist unless you sell the shares, which then would mean you are giving up your 51%, so it did not make sense in the first place," said Robertson.
"Economic growth also depends on investment and in our case economic growth is discouraged by our policies such as indigenisation. We need to review that if we are to create jobs, because you cannot create jobs if you are not attracting investment."
He said one option was for Zimbabwe to borrow money, but this was unrealistic because of its debts.
"I don't see the situation improving any time soon. One of the options is to reduce the burden caused by the public sector, but they can't retrench because they don't have money to pay packages. At the same time they can't keep all the workers because they can't pay them," said Robertson.
ZCTU secretary general Japhet Moyo said the government was facing an uphill task to turn the economy around. He called for policies that attract investment.
"The government needs to create a conducive environment for investment. They need to get rid of policy inconsistencies as well as minimise risk. We are worried because the fact of the matter is that current trends don't seem to indicate that the government can live up to its promises."
Gumbo said the greatest challenge militating against the party's objectives was sanctions, but he insisted Zanu-PF would find an answer.
"Sanctions are still in place. We have no lines of credit and the International Monetary Fund and World Bank are insisting we clear our debts before we [can] access credit, and all this is meant to ensure the government fails," said Gumbo.
"The objectives of the sanctions are very clear: to make the people of Zimbabwe scream and turn against their government."