Why Mnangagwa could easily pull through though people still do not trust ZANU-PF

President Emmerson Mnangagwa

Two months into Emmerson Mnangagwa’s presidency, Zimbabwean business, industry, farming and media representatives say they are cautiously optimistic that the new President could turn around the country’s sclerotic economy – and may deliver sufficient economic gains in the next few months to triumph in elections expected in  four or five months.

They say Mnangagwa has made a promising start in his bid to stabilise the economy, singling out his partial repeal of the Indigenisation and Economic Empowerment Act that choked off foreign investment and his pledge to compensate and reintegrate white farmers who lost their livelihoods in land reforms which devastated the agricultural sector.

Interviewees said that while Mnangagwa, who replaced Robert Mugabe after military intervention in November, has engendered hope of an economic recovery, they want to see early progress on reforms sustained and expanded, and believe it is incumbent on the opposition Movement for Democratic Change – comprising two parties: MDC-T and MDC-N – to overcome its factionalism to hold the president and his government to account over pledges to lift the country out of its financial mire.

The challenges facing Mnangagwa are immense as Victor Nyoni, the CEO of the Association for Business in Zimbabwe, underlined, “The economy has been destroyed. Unemployment is around 90 per cent, industrial capacity is operating at below 50 per cent and most of the companies in Zimbabwe are using archaic machinery and require retooling.”

Although tainted by his association with Mugabe and the discredited ruling party, ZANU-PF, several interviewees cited Mnangagwa’s positive language since coming to power and economic initiatives as grounds for cautious optimism.

The President of the Confederation of Zimbabwe Industry, Sifelani Jabangwe, said his faith in Mnangagwa stems from his time as vice-president, saying he showed himself to be a “man of action”, overseeing the implementation of effective pro-manufacturing policies – resulting in average capitalization growing for the first time – and an agricultural subsidy programme that contributed to record production of maize, the country’s staple food.

“So the way we are looking at it is that if that approach is implemented in terms of other challenges that the country faces, the economy should grow,” he said.

Jabangwe said that despite what the economy has been through, certain fundamentals are fairly positive.

“For instance (road) infrastructure is old but it is there. It is about repairing potholes which is much better than having to establish a new network. The railway system is very old (though) with investment you could upscale what you have got there.

“But there are a lot of other positives that the economy has. Peace and security is a key one. Crime rates are extremely low for the region and even (compared to) some countries in the EU.”

Peter Steyl, President of the Commercial Farmers’ Union of Zimbabwe, has been encouraged by Mnangagwa’s offer of compensation to white farmers – currently being calculated – and plans to reintegrate them into the Zimbabwean agricultural sector, the backbone of the economy.

“For every job created on the farms, at least seven jobs are created in the value chain,” he said.

While it was early days, he said the message he is getting is “that farming will be down to people who can farm and that (land) won’t be handed out on a patronage or colour basis. I do see a more integrated agricultural system going forward ”.

Arguably the biggest reform introduced so far is the partial repeal of the indigenisation law. The law required foreign investors to cede majority control of their investments to Zimbabweans, but will now only apply to the diamond and platinum mining sectors.

“We never want to see (such legislation) again in our economy,” said Nyoni, pointing out that it “scared away” investors and was used by Mugabe to enable “his cronies to own companies corruptly”.

Nyoni said Mnangagwa has spoken of the need to improve the ease of doing business in the country and has tasked ministers to identify other pieces of legislation that are causing companies problems.

“Ministers have been consulting us on what it is we want to see changed in the context of business. We are struggling as we speak. We are even unable to pay for imported raw materials because of the lack of foreign currency.”

Liquidity he says will only begin to improve once the economy shows signs of recovery and the country receives lines of credit and foreign direct investment.

Overseas investors are likely to hold off until they see evidence that Mnangagwa can stabilise the economy, but diaspora Zimbabweans are already keen to seize opportunities, recently proposing to invest $800 million in several sectors.

Anele Ndlovu, President of the Zimbabwe-South Africa Forum, which represents Zimbabwean exiles, said his members are already looking for foreign partners and are “gunning for big things” in the mining, energy and infrastructure sectors as well as targeting stakes in public enterprises.

He said the diaspora business community is excited about the changes that have taken place in the country but are also alert to potential obstacles.

He noted that while Mnangagwa has set up a ministry to deal with investors and taken steps to streamline the investment process, the attitude of bureaucrats could still prove to be a hindrance.

He said it will take time to change a mindset conditioned by 37 years of the Mugabe regime.

“If a person has stayed in prison for too long, to rehabilitate that person can be extremely difficult,” he said.

“The thing that will delay investment in this country will not be the investors.”

With general elections due in four to five months, many are wondering whether Mnangagwa and ZANU-PF can do enough to persuade Zimbabweans who formerly voted for the MDC to switch allegiance.

Wisdom Mdzungairi, the editor of the independent newspaper NewsDay, said Mnangawa wants to be elected in a free and fair ballot, and will introduce reforms that will enable “Zimbabweans to say, ’you know what I think these guys are on the right path, let us give them a mandate’. If they are able to show in the next few months that they (can bring about positive economic change) and Zimbabweans can derive benefit from it, I’m sure they will win the election.”

Already there are tangible signs that things are moving in the right direction:

  • civil service salaries have started to be paid on time;
  • the availability of cash at ATMs has improved;
  • some ZANU-PF officials have been arrested on corruption charges;
  • inefficient parastatal companies are to be reformed and long suspended infrastructure projects have started moving again.

The pace of change appears to have wrong-footed the opposition, with ZANU-PF adopting many of its policies and putting them into practice. Nyoni said this “created the impression that ZANU-PF is now a different outfit”, though he stressed it remains the least trusted party in the country.

With the main opposition party, the MDC -T, preoccupied with infighting over the succession of its ailing leader Morgan Tsvangarai, it has struggled to respond effectively to Mugabe’s departure.

“Their mantra was ‘Mugabe must go’, and now he has, so they must look for another catchphrase,” said Mdzungairi.

“What they are trying to say is that ‘yes there is a new dispensation, but it is still Zanu-PF’. What has happened in the last few months has thrown the opposition into a quandary.”

Interviewees said the MDC-T must quickly choose a new leader and get down to the business of opposition, develop new policies that compete with those of the government and hold it to account over its pledges.

If it does, the party could mobilise sufficient support to raise the prospect of another government of national unity, said Mdzungairi. But if it fails to reinvent itself, the MDC-T’s influence may wane, and it could “end up becoming a pressure group,” said Ndlovu of the Zimbabwe-South Africa Forum.

“If you have nothing to offer the electorate, you are buried, you are history.”

For the moment, there is little the opposition can do to quell the sense of optimism created by Mnangagwa’s elevation.

Without doing too much, he has elicited a great deal of goodwill even though questions have been raised about the inclusion in his cabinet of ZANU-PF officials deemed to have under-performed in the previous administration.

“We expected him to do better in terms of his team,” said Nyoni. “But if you look at the extent to which the economy has been destroyed, anyone who comes in and behaves differently to Mugabe is likely to do better. That does not mean that we can’t have even better.”

*This report was produced by Alaco, a business intelligence firm, but has been updated by The Insider.