The country had begun to emerge from a decade of economic ruin mainly engineered by President Robert Mugabe and his repressive Zanu PF regime. Mugabe’s policy and leadership failures were the root cause of the economic meltdown which peaked to appalling levels in 2007/2008. There was hyperinflation, shortages of goods and services, a breakdown of infrastructure and social services, mass unemployment, poverty and disease (read cholera!).
Exogenous factors — such as global economic vicissitudes, limited Western sanctions and erratic weather patterns — worsened the situation.
However, the advent of the inclusive government was beginning to reverse the untold damage inflicted upon the economy by Mugabe’s corrupt and incompetent regime.
The dollarisation of the economy restored macro-economic stability and many companies were starting to show signs of recovery. Capacity utilisation had on average increased from 10% to around 35% by December last year. The Zimbabwe Stock Exchange (ZSE) had grown by over 118% to over US$4,5 billion. The growth was driven by foreign investors who saw a huge potential in the local bourse. A large percentage of money in circulation right now came from portfolio investments and the country was benefiting immensely.
Investment conferences were held signalling the restoration of peace and stability as well as investor-confidence and new capital inflows. Capital flight had crippled the economy badly.
Recovery was beckoning.
Closed companies were also reopening and recovering. Not only companies had reopened, but also schools, hospitals, clinics and other utilities. Goods had returned to supermarket shelves and people had stopped scrounging like vagabonds for food.
Those who had fled political repression and economic collapse in their own country to foreign lands, mainly South Africa, Britain, the US, Australia, Canada and New Zealand, were considering returning home.
But this could soon all change for the worse. With the promulgation of indigenisation regulations whose impact could be as detrimental to the economy as the disastrous land reform programme, the situation is once again uncertain and the casualty of this reckless electioneering and elitist greed would be the economy and the people.
After the indigenisation laws, signs of disaster are already looming. The ZSE has ground to a halt and the collapse of the bourse could be imminent. Investors have put projects worth billions of dollars on hold. South Africa’s Shoprite, for instance, has stopped negotiating with OK. Some are taking out their money and millions have gone out. Cash shortages could soon be back.
What Zimbabwe needs now is more investment and capital, not foreign company seizures through the backdoor. As things currently stand, Zimbabwe has by far more indigenous companies than most countries in Africa. The footprints of local entrepreneurs on business are all over the place. Locals are into mining, financial services and banking, hotels, catering and tourism, manufacturing, and productive commercial agriculture. We need to build on this and avoid destroying what is already on the ground through official policy folly.
One would have thought Mugabe and his party had learnt something from the chaotic land redistribution exercise. Just as the country was starting to recover, the world is again watching with dismay and horror another act of self-destruction clearly fuelled by official stupidity.
Zanu PF officials are hiding under the convenient cover of legitimate historical grievances to pillage the economy and enrich themselves at the expense of the nation and its people.
Zimbabweans in general wanted land reform and want indigenisation but they don’t want officials to use that as a pretext to cling to power and for primitive accumulation of wealth.
The land grabs provide the clearest evidence of what is going on here. Zanu PF officials and their hangers-on overthrew the white landed aristocracy under the guise of empowering the poor black majority but after that they amassed farms and creamed off the best ones for themselves. The same will apply with indigenisation.
Part of the problem is the national political leadership’s lack of vision and incomprehensible ignorance.
Whenever questioned on the economic programme of the state since 1980, Zanu PF officials have always been incapable of a coherent reply because, precisely, they are completely ignorant of the economy of their own country.
As Frantz Fanon would say: “This economy has always developed outside the limits of their knowledge.
“They have nothing more than an approximate, bookish acquaintance with the actual and potential resources of their country’s soil and mineral deposits; and therefore they can only speak of these resources on a general and abstract plane.”
What is needed is a strategic and structured indigenisation policy which thrusts locals into the mainstream economy, while ensuring economic growth, employment and prosperity. The last thing we need are seizures of foreign companies, some of which are now shells anyway, by whatever method and name!