Country FilesSouthCountry Profile 2014: ZIMBABWE

Fri,19Jan2018

Posted on Thursday, 06 February 2014 09:21

Country Profile 2014: ZIMBABWE

 The nonagenarian's world of dreams

President Robert Mugabe will be celebrating his 90th birthday in February with perhaps part of his brain focused on how torepair Zimbabwe’s battered economy, as well as his own bruised image. He at least has the comfort of knowing that he and his party can rule once again without the need for awkward political partners,thanks to the result of the 31 July general elections, whereby he personally took 61% of votes as president and his Zimbabwe African National Union- Patriotic Front (ZANU-PF) won 160 of the 209 seats being contested.

 

 TABLE OF CONTENTS:

Top Zimbabwean Companies

Top Zimabwean Banks

 

theafricareport-zimbabwe-72dpiThe nonagenarian's world of dreams

Tsvangirai’s critics look to find a successor, or replace him by 2018

ZANU-PF makes new pledges to reverse the economy’s downward spiral

 President Robert Mugabe will be celebrating his 90th birthday in February with perhaps part of his brain focused on how torepair Zimbabwe’s battered economy, as well as his own bruised image. He at least has the comfort of knowing that he and his party can rule once again without the need for awkward political partners,thanks to the result of the 31 July general elections, whereby he personally took 61% of votes as president and his Zimbabwe African National Union- Patriotic Front (ZANU-PF) won 160 of the 209 seats being contested.

Mugabe’s arch-rival Morgan Tsvangirai, of the Movement for Democratic Change (MDC), will continue to throw doubt on the accuracy of those results. He has accused ZANU-PF of hiring an Israeli company for a wholesale rigging exercise. Western governments seem to agree with him to the extent that both the hurried manner of the poll and the official results themselves did not appear to provide an accurate measure of the democratic will of Zimbabweans. As before,Mugabe received warm comfort and endorsement from both the Southern African Development Community (SADC) and the African Union – the guarantors of the so-called Global Political Agreement (GPA),which brought in the now-defunct coalition government in which Tsvangirai held office as prime minister for four years.

 

REFORMS MUST CONTINUE

Mugabe’s freedom to stay on at the helm for the foreseeable future is now only challenged by those media practitioners who insist on a continuation of the reforms agreed under the GPA. This is especially true of the broad casting sector, where the state broad caster continues to operate a monopoly. The ruling party may have the two-thirds parliamentary majority it needs to make amendments to the law, but it remains to be seen if this will be used to facilitate or resist reforms such as this. Mugabe has made a few conciliatory noises towards Western countries but he and his inner circle will remain under Western sanctions because of the West’s view that the elections fell short of expectations.

Fraudulent or not, the election outcome was disastrous for the MDC,which will see further infighting, as well as calls for Tsvangirai to quit the leadership. The party’s treasurer, Roy Bennett, argues from his self-imposed exile in South Africa that the opposition needs to be revived in preparation for the next elections due in 2018. But Tsvangirai says he is not going anywhere, pointing out that he was elected at congress and only the supreme decision-making body of the party can recall him. As the party’s founder, he says the democratisation agenda is incomplete and he is determined to see through“ the people’s project”.

 

MADHUKU’S NEW HOPE

 

Tsvangirai’s former ally Lovemore Madhuku, a law lecturer at the University of Zimbabwe, has formed a political party that he says brings in new hope for Zimbabweans. The National Constitutional Assembly, formerly a pressure group that advocated for “a people-driven constitution”, has been transformed into a fully-fledged party, with Madhukuas its interim leader. He accuses Tsvangirai of undermining the wishes of a majority of Zimbabweans by agree in to the coalition with Mugabe in2009. He also denounces the new constitution adopted at the referendum of March 2013 as undemocratic and giving too many powers to the presidency.

Winning an election is one thing and governing the country is another. A few voters may even expect ZANU-PFto deliver on its pre-election promises. After the chaotic farmland grabs and the organisational failures of the past 14 years, Mugabe might at least be expected to set about reviving the agro-based economy and reversing the steady downward trend that the seizures initiated. Instead, he has made his fore most priority the controversial indigenisation policy that, his critics say,has the immediate potential of scaring away the few investors who have been attracted by the country’s potential for recovery and growth.

At his latest inauguration, Mugabe described the implementation of his black empowerment programme as a “new revolution”. The policy requires all foreign-owned companies to cede at least 51% of their shareholding to black Zimbabweans. Some of the foreign-owned companies being targeted by the government are financial institutions like Standard Chartered Bank and Barclays.

Although Mugabe has publicly calledfor zero-tolerance of corruption, safety nets are non-existent, and the Anti- Corruption Commission remains a toothless bulldog; its critics say it prefers to chase small fry rather than the large fish. Transparency is woefully absent in diamond sales with the looting of gems by a few in the ruling elite. ZANU-PF likes to claim that its mandate will re-energise it to improve livingconditions for ordinary Zimbabweans. The new government Mugabe loyalist Patrick Chinamasa as finance minister – says it will be launching a blueprint for “ socioeconomic transformation” to remove the country from its “economic shackles”. But, in the absence of any sign of how this will be achieved, the economic outlook for 2014 looks increasingly uncertain. Local economists say that reduced capital inflows would severely damage the prospects for investment in capital projects that could underpin sustainable economic growth.

 

theafricareport-zimbabwe-72dpi-2BANKING VULNERABILITY

 

Although growth of 4.4% was recorded in 2012, the optimism generated during the years of the coalition government quickly began to fade. In September the World Bank revised its 2013 growth predictions down to 3%, saying there was little prospect of recovery in 2014. The Bank has warned specifically of “vulnerability in the banking sector”. Banks that were confidently lending before the elections have subsequently pulled in their horns. According to the World Bank, as fiscal revenues stabilise at an anticipatedlevel of around $4bn, the treasury will no longer be able to keep up the pace of the fiscal recovery achieved after 2009, if it is to absorb new commitments.

Zimbabwe’s external position has been supported by substantial short term capital inflows;much now depends on the continuing overall attraction of emerging markets in general and the willingness of investors to accept increasinglevels of risk within the country itself. Concerns over the new government’s economic policies, including extensive indigenisation legislation, have prolonged the wait-and-see attitude of both domestic and foreign investors that already characterised the run-up to elections.

Any increased volatility of commodityprices would affect Zimbabwe’s exportgrowth, worsening the current accountdeficit, shrinking fiscal revenues andupsetting the economic recovery process.Agriculture’s prospects have beenrevised downwards and the sector isexpected to slightly contract by -0.3%.Several newly resettled farmers haveno access to bank loans and may not beable to finance their crops in the 2013/14 farming season.

The decline in international prices isdampening growth of the mining sector.The manufacturing sector’s grow this projected at1.5%, stunted by low investmentand declining competitiveness amidsttight credit conditions. The services sectorwill remain the biggest contributorto gross domestic product, at 41%. Theexternal position came under pressure in2013.According to the national statisticalagency, exports fell slightly to $1.5bn inthe first six months of 2013, with mineralexports and tobacco contributing the bulk of exports.

FOURTEEN YEARS ON, SMALL FARMERS STILL STRUGGLE TO SURVIVE

JOSEPH MTAKWESE MADE ZANU-PF’s armchair expert on farming, has followed Zimbabwe’s land resettlement programme from its origins in 2000. Serving successively as minister of lands, agriculture and rural resettlement; agricultural mechanisation; and now once again as agriculture minister, he has repeatedly promised bumper harvests to come. When Zimbabwe – the former ‘ regional breadbasket ’ – began to suffer severe food shortages (maize from Malawi and Zambia had to be imported again in 2013), Made said others were to blame and continued to forecast a breakthrough.

Out in the countryside, small farmers cannot access the vital loans they need because they have no collateral. The government has chipped in with promises of a one-off support facility. But a new farmer, Herbert Murendo of Mazowe, said the government package was insufficient. “What we want is access to capital and our failure to access it shows that government is not taking farming seriously.” Crucially, banks need title deeds, which government is not keen to issue, and the promised 99-year leases have never materialised.

Confirmed in office again in 2013, Made said his department would engage with the banking sector, so that new agricultural loans might be opened up. Few believe him now.

 

 Top Zimbabwean Companies

Rank 2012Rank 2011CompanySectorCountryTurnover (Thds $)Turnover changeNet profits
219249INNSCOR AFRICAHOTELSZIMBABWE627,07721.49%38,711
226271ECONET WIRELESSTELECOMSZIMBABWE611,11631.85%165,741
246300DELTA CORP.AUTOMOBILEZIMBABWE554,76735.97%73,747
309421OK ZIMBABWERETAILZIMBABWE412,53160.25%10,306
336347MEIKLES AFRICADIVERSIFIEDZIMBABWE354,1027.16%-3,537
397491AICO AFRICAAGRIBUSINESSZIMBABWE293,29239.24%2,743
456-NATIONAL FOODS HOLDINGSAGRIBUSINESSZIMBABWE233,99841.06%7,899
 

 

 Top Zimabwean Banks

 

No banks from Zimbabwe featured in The Africa's Report's Top 200 Banks in Africa 2012.



Subscriptions Digital EditionSubscriptions PrintEdition

FRONTLINE

NEWS

POLITICS

HEALTH

SPORTS

BUSINESS

SOCIETY

TECHNOLOGY

COLUMNISTS

Music & Film

SOAPBOX

Newsletters

Keep up to date with the latest from our network :

subscribe2

Connect with us