Zim takes small steps

In the Harare suburb of Emerald Hill stood a man with a cardboard poster hanging around his neck.

“Voluntary work, please help,” it read. His colleague filled in one of Harare’s growing number of potholes with a mixture of broken bricks and earth.

“Making a plan” is a Southern African mantra.
If you can’t find a job, in extremis use the state’s collapse to support yourself.

But far from being confined to those labouring for a living, this has become a strategy for political survival. While many believe that Zimbabwe’s collapse has been a by-product of politically motivated if economically spastic action, this destruction has been a tool for self-enrichment by a small elite connected to Zanu-PF.

The devastation of Zimbabwe’s economy has provided many opportunities for rent seeking. The seizure of nearly 4 500 commercial farms, more than 90% of the total, enabled land redistribution to political cronies. Hyperinflation facilitated the purchase of assets effectively for nothing. For every tens of thousands of economic losers there are always winners, cutting deals with the government and then cutting them in.

Putting this destructive genie back into the bottle was never going to be easy. But progress has been made.

Dollarisation has snatched away the Reserve Bank’s role as a private banker to the elite. No longer can it print trillion-dollar bills at numerous exchange rates offering arbitrage opportunities to those with carefully allocated access to foreign exchange.

Attempts at what Finance Minister Tendai Biti calls “economic democratisation” have been paralleled by ongoing political reforms, including recent electoral reforms.

And, most importantly, the Movement for Democratic Change, which came into the unity government in 2008, is growing into the role. Unlike most African counterparts who are focused on gathering aid from outside, MDC leader Morgan Tsvangirai seems to realise that the future is up to him. As prime minister he controls the Council of Ministers, a quasi-Cabinet. If he cannot manage things from there, no reform is likely.

There are new challenges. Most of these are related to the succession battle for 86-year-old President Robert Mugabe’s position. This helps to explains why Zanu-PF factions are positioning themselves to benefit from the wealth of the newly discovered Marange diamond fields.

The succession race also provides a context for Zanu-PF’s promotion of the Indigenisation Bill, which threatens not only to distribute 51% of existing firms to previously disadvantaged Zimbabweans but to preserve certain sectors (notably farming) for them too. All this makes the job of the finance minister very difficult. In fact, some would say Biti’s job is nigh impossible. Of his annual budget of just $1.4billion, $900-million is spent on civil service salaries. Donor funding is already around 20% of the $5-billion economy and much of this is spent on food aid.

Even so, Zanu-PF has pinpointed external “sanctions”, which essentially amount to “shopping sanctions” on the elite, as the reason for economic failure and the stumbling block to continuing reforms.

But perhaps the reformers’ best asset is that the source of ill-gotten funds has dried up. Apart from the odd get-rich-quick opportunity, such as the Marange diamonds, much of Zanu-PF is poverty stricken. No wonder MDC opinion polls give Mugabe’s party just 15% of national support.

If salvation is not going to come from outside, it won’t be instant. Recovery will be at least as long as the period of decline. But continuous small steps from a determined domestic leadership offer the best and probably only chance of ever getting there.

Dr Greg Mills heads the Brenthurst Foundation, dedicated to strengthening Africa’s economic performance

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