IN a few days it will be 12 months since Zanu PF regained total control of the State in Zimbabwe.
They have to contend with a new Constitution — the one element in the Global Political Agreement that they could not circumvent, but clearly they have a strategy to deal with that problem by simply fudging its implementation and delaying the required legislative changes to our laws.
However, the main outcome of the election has not been progress, recovery and growth. Instead, our economy has voted “no confidence” in the Zanu PF regime in very clear terms. The stock market was the first casualty — declining immediately by 30% and this decline has continued with an 8% decline so far this year.
Then we saw cash and capital flight — the former out of the formal sector and banks and retreating back into the informal sector, the latter out of the country and back to safer havens.
Since July 2013, 23% of our commercial banks have either ceased to operate or have been placed in receivership with the total loss of depositor’s funds.
All other banks report high levels of non-performing loans and significant write downs of their loan portfolios as well as very tight liquidity conditions. Hundreds of firms have taken the easy way out and gone into liquidation and many others are simply not paying their creditors or staff. Nearly all State enterprises are technically insolvent, including the Reserve Bank of Zimbabwe.
As a consequence, the rapid recovery in economic activity that characterised the four years under the control of the Government of National Unity (GNU), raising revenues to the State from $280 million in 2008 to $4 billion in 2012, has not only halted, but has actually started to decline.
The response of the government through its tax agencies has been to intensify collections and to strip many State-controlled funds of any accumulated surpluses. They have also borrowed funds from anyone who would make such funds available. As a consequence, it is rumoured that they have accumulated nearly a billion dollars of new domestic debt.
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Whatever the size of the debt and to whom it is owed, it is unsustainable and will only exacerbate the economic problems of the regime this year.
In its international relations, the situation has also deteriorated. We have the worst possible candidate as Foreign Affairs minister that we could have had.
In addition, after six months of trying to work out what had happened in 2013, nearly all significant foreign governments have concluded that the GNU was a failure, that if anything, the humanitarian and political situation in Zimbabwe has deteriorated and that the prospects for reform and improved governance have deteriorated.
They have scaled back their involvement and reduced aid flows. They have focused their attentions on other regions with problems that are either more directly concerned with their own interests or constitute a real threat to global security and stability.
Then finally, Zanu PF has appointed a number of people to key positions in the new government who clearly have nothing to offer in terms of ideas or energy. Only the Tourism and Finance ministers seem to have any sort of grip on their portfolios, the rest are the same old corrupt and incompetent characters who led the country to the economic and political crash in 2008.
This is compounded by the fact that the man at the centre of the whole mess, President Robert Mugabe, is far from well, increasingly frail and unable to handle his responsibilities.
In culinary terms, put all of the above into a bowl and blend with a big spoon and what have you got — national paralysis.
The population is in full retreat back into the informal sector and survival mode. Hundreds are leaving the country for greener pastures (the majority illegally) and the State and all local authorities are close to becoming dysfunctional. We simply do not have the money to do anything more than pay a bloated Civil Service and armed forces their salaries and little more.
In all institutions except those of central government, payment of salaries is a problem and it’s only a matter of time before the same malaise infects central government itself.
As many of my friends have told me in the past, countries do not go bust; they just sag at the knees. We came close to going bust in 2008 and were rescued by the interventions of South Africa with the support of the G7 Group of major powers.
This time we are sagging at the knees and the result is stagnation and a slow decline in economic activity. The State, already collecting an astonishing one third of gross domestic product is desperately trying to get more out of the stones and in the process is strangling what remains of the economy.
So long as we do not start shooting each other, or infecting our neighbours with the many diseases we suffer from, we run the risk that we will be simply ignored with regional states pursuing a strategy of containment rather than engaging in any attempt to force some sort of sense into local heads.
We can turn the economy in Zimbabwe around in short order if we do the right things and put our best people into positions where they can take control and start putting Zimbabwe on a path to growth. In fact it’s my own view that Zimbabwe could become the fastest growing economy in Africa by the end of next year.
We have all the right ingredients, but it’s not going to happen with the present crew in charge.
Eddie Cross is MDC MP for Bulawayo South. This article first appeared on his website www.eddiecross.africanherd.com
