PRESIDENT Robert Mugabe on Sunday threatened that his government would pull up its sleeves, take off its gloves and prepare for a tough fight with the business community, especially the comme
rcial banking sector which he accused of letting his administration down.
Mugabe (79) said he felt let down by indigenous businessmen for allowing Zimbabwe’s economy to nose-dive to such shocking levels.
A visibly shaken Mugabe told mourners gathered at the Lewisam home of late Vice President Simon Muzenda (81) that some businessmen were teaming up with the West in a bid to worsen the already precarious economic situation.
Muzenda, Mugabe’s confidant since the 1940s, died at Parirenyatwa Hospital on Saturday after a long illness. He was buried at the Heroes Acre on Wednesday.
In an address made in Shona, Mugabe said he sometimes even wondered whether his government had done “something seriously wrong” by allowing indigenous players to open commercial banks and major businesses.
He said the same individuals who were allowed to operate were now sneaking behind government’s back to “sabotage the country” by flouting various regulations.
Major financial institutions to have mushroomed after Independence include NMB Holdings Ltd led by Julius Makoni, Trust Holdings (William Nyemba), Kingdom Financial Holdings (Nigel Chanakira), Century Holdings (Jefta Mugweni), Metropolitan Bank (Enock Kamushinda), First Banking Corporation (Livingstone Gata), Barbican Holdings (Mthuli Ncube), and Intermarket Financial Holdings (Nicholas Vingirai).
Zimbabwe is going through its worst economic crisis since Independence in 1980.
The country’s main macro-economic problems to June this year include hyperinflation (426,6%), a decline in gross domestic product (11,5%), high domestic debt ($546 billion), a weak balance of payments position, and crippling foreign currency shortages that have resulted in escalating fuel and electricity debts.
Mugabe said the commercial banking sector was now more concerned about making as much money as possible at the expense of customers and the nation.
He said while government had gone out of its way to allow indigenous players to participate in economic reconstruction, the same individuals had now turned against him and his 23-year-old government.
However, businessmen interviewed at Muzenda’s home stressed that while it was worrying that some individuals were abusing the financial system, government officials sometimes operated behind the scenes to manipulate contracts.
They said it was unfair for Mugabe to be hostile to the business community in general and bankers in particular because government’s policies were, in many instances, unclear and confusing.
They pointed out at the short lifespans of economic policies such as Zimprest, the Millennium Economic Recovery Programme, National Economic Recovery Programme, and the latest National Economic Revival Programme, most of which were discarded before implementation.
The individuals said instead of taking advice from the business community, government tended to become arrogant, accusing it of belonging to the opposition Movement for Democratic Change, which led to polarisation.
“This arrogance is going to be very costly for Zimbabwe,” a businessman said. “Actually this arrogance has resulted in us being where we are right now. In the pits.”
The individuals alleged that the 150-member Mugabe-appointed National Economic Consultative Forum (Necf) had been turned into a “laughing stock” because some decisions made at its meetings were “twisted” before they reached the president in order to please him.
The Necf comprises individuals from various sectors of business, labour, and government who meet regularly to try and find solutions to Zimbabwe’s problems.
In an interview Necf spokesman Nhlanhla Masuku told businessdigest that the Necf lacked sufficient funding which was why decisions made could not be implemented timeously.
Businessmen also alleged that there was favouritism in government-influenced deals, which continued to be awarded to the same individuals/companies just because they had strong government ties.
They described deals such as those for fuel (Petrofin Bills), Grain Marketing Board (Grain Bills), Zimbabwe Electricity Supply Authority (Megawatt Bills) and those for supplying foodstuffs and manufactured goods to the army and police as “eyebrow raising”.
They alleged that when, on the other hand, institutions decided to enter into contracts without government involvement, the deals were, in many instances, scuttled.
“What (Herbert) Murerwa said in parliament has now been repeated by Mugabe and we are going to see many individuals fall by the wayside, especially those who do not play ball with government,” a businessman told businessdigest. “Government believes it no longer has anything to lose even if it victimises individuals because it is already isolated by the international community.”
Murerwa said in parliament: “It has been established that a number of financial institutions are involved in illegal foreign exchange market activities. It must be noted that, while the Exchange Control (General) Order of 1996 confers authorised dealership status to all commercial banks and accepting houses upon registration, authorised dealership is a privilege and not a right.
“Accordingly, stiffer penalties will be taken against those institutions that fail to comply with Exchange Control Regulations and Directives. In this regard, there will be no sacred cows. Repeal of the relevant legislation to provide for movement away from conferment of status to granting licences, whose renewal is subject to satisfactory conduct by the licensed authrised dealers, is also under consideration.”
NMB was the first financial institution to face government’s wrath when it was served with a notice for the suspension of its foreign currency trading licence.
While not being a financial institution but a major publishing empire the Associated Newspapers of Zimbabwe (Pvt) Ltd (ANZ) is also battling with government for a publishing licence for its two titles – The Daily News and The Daily News on Sunday.
The ANZ’s chairman, business mogul Strive Masiyiwa, is no stranger to the wrath of Mugabe’s government.
Masiyiwa fought a lengthy and costly legal battle against government for a licence to operate Econet Wireless Holdings Ltd.
“It’s serious politics at play,” a businessman said. “But this time the game is getting very very dirty.”