HomeBusiness DigestForget the Reds, meet the bona fide capitalists

Forget the Reds, meet the bona fide capitalists

AT a rare meeting with journalists a fortnight ago, President Robert Mugabe disclosed that he owned Highfield Farm in Norton, a farm he bought in the early 1980s, and Gushungo dairy farm in Mazowe, which he called a family farm.

From there, in the words of David Copperfield, he “meandered” into business matters and unveiled the capitalist in him.
He spoke about his business, a dairy farm seized from a hapless white farmer. He complained bitterly that DZHL (formerly Dairy Marketing Board) had failed to pay for milk deliveries for six months and spoke of his investment in Gushungo Holdings, giving a rare insight into his grasp of business. He seems to have now  become a capitalist.
He was commenting on the Nestlé fiasco last year where the food conglomerate refused to buy milk from his farm owing to relentless pressure from various activist groups.
Mugabe claims he made a business decision; to sell milk to a company that pays on time. He realised that Nestlé’s decision was basically business and nothing personal in other words.
He said: “Nestlé has a right to choose people whom they want to deal with. We have parted ways and it was a question of external forces. It is an issue of sanctions –– it should not have been on a political basis.”
Mugabe said they had now reverted to Dairibord, which pointed out that it did not have money.
“They (DZHL) didn’t pay us for six months –– imagine six months…aahh vanenge vachiti tinenge tichirarama sei (how do they think we survive)? The dairy industry is very costly. We put so much into it and we bought machinery which is very expensive. We had hoped that Gushungo will be a model farm,” he said.
Years back, a communist like him would have been thinking of how well he would share his milk with his neighbours in the spirit of socialism.
And harbouring such a business idea would have been treasonous by communist standards.
His communist friends in the party would have branded him “an ally of the capitalists and an enemy of socialism”.
Mugabe’s party, Zanu PF, adopted a communist style leadership code in 1984, barring members from venturing into businesses for profit except for small poultry projects. Leaders could also not get into farming projects on land above 50 acres in size among other prohibitions.
The leadership code reads: “Zanu believes that a leader who concentrates on acquiring property, or who personally engages in the exploitation of man by man, rapidly becomes an ally of the capitalists and an enemy of socialism; and of the masses of the population.”
It also said: “Except as provided in this section, and except as required by his official position, a leader may not: –– own a business, a share or an interest in a business organised for profit; provided that this shall not be interpreted as prohibiting such petty side-line activities as chicken runs, small plots and gardens on one’s residential property; receive more than one salary.”
The code also prohibits members from taking up directorships in a private firm or business organised for profit, own real estate or other property, or an interest in real estate or other property from which he receives rents or royalties.
The code further disallows owning more than one “dwelling house” except as dictated by family requirements, but in no event shall additional houses be for purposes of earning rents.
“In addition to a salary, receive fees on account of lectures or professional activities in excess of $1 000 a year. Nothing in this section prohibits a leader from receiving a fee/ or a royalty on account of a book or work of art or patent that he personally wrote, created or invented,” read the code.
“The Central Committee shall require that leaders disclose their assets periodically, and when so asked, leaders shall comply. Whilst a leader may secure a loan against his salary, in no circumstances shall he use his position to borrow funds or secure any other personal benefits.”
The party was still communist and a thousand Zimbabwean dollars was still a considerable sum.
Members were supposed to disclose their wealth and financial affairs.
But the code was only valid for a while. Cracks within the bastion of communism in Europe had been emerging. The then president of the USSR Mikhail Gorbachev was pushing reforms in the economy and in government through his glasnost and perestroika.
The USSR began a transformation from communism into capitalism and pursued a free market economy. When the collapse of communism in Europe finally happened, the Zanu PF leadership had embraced capitalism quietly after realising that even die-hard “comrades” had betrayed their own cause and were moving towards capitalism.
The code was abandoned.
Four years down the line, the first high-profile corruption scandal –– Willowgate –– rocked the young government. Ministers and well placed individuals were caught with hands in the cookie jar.
The scandal claimed the scalp of Morris Nyagumbo, who took the code a bit too seriously and committed suicide.
In retrospect, the scandal was a mere storm in a tea cup and Nyagumbo’s offence seems laughable now.
Nyagumbo had helped himself to the then trendy Toyota Cressidas for resale. Now his buddies  are cruising in luxurious Mercedes Benzes and Toyota Prados.
Other culprits such as Fredrick Shava were forgiven. He is now Zimbabwe’s ambassador to China.
After Willowgate, leaders have never disclosed what they own and how they got their money. Corruption has become entrenched and party bosses do not respect the code. To them, the need to fight corruption went away with the Wilson Sandura Commission, which investigated Willowgate.
Government and party officials own businesses in various sectors of the economy. Ministers own more than one farm flouting their own policy of one-man-one-farm policy when Zimbabwe embarked on a land reform programme.
Even Mugabe does not say where he got the money to pay for equipment given his paltry salary which was wiped out in the hyper-inflation days.
He also does not reveal what else he owns. His critics say he has built a business empire apart from the milk business.
Mugabe says his “relatives” also own other farms. Back in those days, the red in him would have defined a “relative” as a “wife, son, daughter, grandchild or any other relation of the family”.
The party’s central committee would have moved to “ascertain that a leader does not derive any financial benefits” from such “relatives” on the pretext that relatives were not to “be used as fronts” in business ventures, according to the leadership code.
But those were the days of socialism and a corruption-free leadership. How times have changed!


Chris Muronzi

Recent Posts

Stories you will enjoy

Recommended reading