Zimbabwe stock market plunges after Mugabe victory

The bourse's Industrial Index fell 11% in a clear sign of jitters over Zanu-PF, whose economic policy centres on the "indigenisation" of foreign firms. 

Nine of the top-10 shares on the $5-billion bourse were trading in the red and its biggest company, Delta Corporation , the local unit of global brewer SAB Miller, crashed 20% to $1.20 a share.

In the run-up to the July 31 election, the index notched up a series of record highs on hopes that Prime Minister Morgan Tsvangirai might unseat the 89-year-old Mugabe at his third time of trying.

Instead, Mugabe, Africa's oldest head of state, won a crushing 61% in the presidential vote and a super-majority in parliament that allows Zanu-PF to change the Constitution at will.

Movement for Democratic Change (MDC) leader Tsvangirai has dismissed the poll as a farce and his party is preparing a legal challenge to what it has described as massive vote-rigging, although analysts say a court bid is unlikely to get very far.

No signs of violence, yet
There has been no sign yet of the violence that followed the last election in 2008 when 200 MDC supporters were killed.

Even without unrest, investors fear an emboldened Zanu-PF could accelerate its indigenisation programme by targeting foreign banks that it says are refusing to lend money to black farmers and small businesses.

"These are initial shocks in reaction to the election results. It was going to happen – maybe until there is some certainty on the policy front from the new government," a trader with a local stockbroker said.

Tsvangirai lawyer Selby Hwacha told Reuters his legal team was preparing to challenge the election result before the Friday deadline.

Under the terms of a new Constitution, the courts must rule on the case with 14 days. Only after the all-clear can Mugabe be sworn in.

'Scientific dismembering'
The 14-year-old MDC, the only serious challenge to Mugabe's 33-year stranglehold on the former British colony, is in tatters.

"Of all our experience, nothing could have prepared us for the 2013 election and the systematic and scientific dismembering of the people's wishes," secretary general Tendai Biti, now outgoing finance minister, wrote on his Facebook page.

Biti's exit casts a shadow over a recovery he helped engineer from a decade-long economic crisis marked by bare supermarket shelves, 500-billion% inflation and tens of thousands fleeing destitution to neighbouring countries.

The rot only stopped when the 15-nation Southern African Development Community (SADC) forced Mugabe and Tsvangirai into a power-sharing government in 2009 that made scrapping the worthless Zimbabwe dollar one of the first things it did.

SADC has given a general thumbs up to the poll, suggesting it is tired of trying to mend Zimbabwe's broken politics and wants to move on.

In the staunchly pro-MDC capital and the second city of Bulawayo, most people went about their business as normal but remained shocked at the size of Mugabe and Zanu-PF's victory.

"I never thought I would consider looking for a job outside Zimbabwe but after the weekend, dusting off my passport has become an option," said Nixon Mkwananzi, a bank teller at a foreign-owned bank in Bulawayo.

Liberal policy turn
Eurasia Group, a political risk consultancy, said the election results "all-but-eviscerate any hopes of a more liberal policy turn".

However, it added that it did not necessarily mean a return to the chaos of the early 2000s, when pro-Zanu-PF militias over-ran white-owned commercial farms and the central bank printed money on an industrial scale.

Besides economic nationalism, many Zimbabweans were alarmed by comments made by Mugabe on the eve of the election about possibly reintroducing the Zimbabwean dollar.

Senior Zanu-PF official Patrick Chinamasa compounded those fears when he told reporters it was a "strategic retreat" to allow the use in 2009 of the US dollar, which he described as "the enemy's currency".

"I hope they don't dare do that. That would be the end for this country," said newspaper vendor Oswald Jani. – Reuters


Hlophe complaint is an eerie echo

But the new complaint against the Western Cape judge president is also unprecedented

Mabuza contract grows by R10m

Eskom’s negotiators in a R100-million maintenance contract came back with a proposal to push up the costs

‘There were no marks on his neck’, Neil Aggett inquest...

The trade unionist’s partner at the time he was detained at John Vorster Square says she now believes his death was not a suicide

Press Releases

Boosting safety for cargo and drivers

The use of a telematics system for fleet vehicles has proved to be an important tool in helping to drive down costs and improve efficiency, says MiX Telematics Africa.

Silencing the guns and firearms amnesty

Silencing the guns and firearms amnesty

Gender-based violence is an affront to our humanity

Gender-based violence is an affront to our humanity

UK-Africa investment summit 2020: Think Africa Invest SA

UK-Africa investment summit 2020: Think Africa Invest SA

MTN unveils TikTok bundles

Customised MTN TikTok data bundles are available to all prepaid customers on *136*2#.

Marketers need to reinvent themselves

Marketing is an exciting discipline, offering the perfect fit for individuals who are equally interested in business, human dynamics and strategic thinking. But the...

Upskill yourself to land your dream job in 2020

If you received admission to an IIE Higher Certificate qualification, once you have graduated, you can articulate to an IIE Diploma and then IIE Bachelor's degree at IIE Rosebank College.

South Africans unsure of what to expect in 2020

Almost half (49%) of South Africans, 15 years and older, agree or strongly agree that they view 2020 with optimism.