PRESIDENT Emmerson Mnangagwa’s drive to revive the floundering economy and reintegrate Zimbabwe into the community of nations is bound to fail if he does not heed growing calls to expeditiously implement far-reaching political and economic reforms.
Chief on the economic reform agenda is the need for the country, which is battling an unrelenting economic crisis, to uphold property rights, tackle corruption, improve the ease of doing business and policy consistency, among other factors.
China, considered Zimbabwe’s all-weather friend, has become the latest addition to the chorus of nations calling on Harare to roll out sweeping reforms which are seen as key towards attracting investment. Across the globe, investors’ perceptions on Zimbabwe as a hostile investment destination seem to have converged. The time for endlessly complaining about Western sanctions and spending millions of dollars on public relations firms to spruce up the country’s image has long passed. Mnangagwa and his government know exactly what should be done to build confidence in the country.
While the “Zimbabwe is open for business” mantra almost convinced powerful nations like Britain, both the West and close ally China have seen through the façade.
It is clear that both Mnangagwa’s friends and critics have teamed up to demand reforms which he promised upon ascending to high office in a military coup that toppled his long-time mentor Robert Mugabe in November 2017. Mnangagwa should understand that while foreign policy may differ from one country to another, business demands are near-universal. Global powerhouses like the European Union (EU), United States (US) and, most recently, China, are ganging up in demanding swift and decisive reforms before they can fully engage Zimbabwe.
Calls for sweeping change from unexpected quarters such as Beijing are testimony to the growing realisation worldwide that Harare is not walking the talk on reform. China, Zimbabwe’s most trusted partner since 2003 when Mugabe pulled out of the Commonwealth after the chaotic land redistribution programme, has until recently begun calling out the government for its financial misdemeanours.
As revealed by this newspaper, last week China complained about the hostile investment climate in high-level talks between Foreign minister Wang Yi and Zimbabwe’s leadership. “Wang also pointed out that there are many examples which point to Zimbabwe as a bad investment climate. He underscored that government must ensure that in its bureaucratic system, there must be no room to solicit for bribes,” a source said last week.
The Asian giant, which has exponentially grown in economic clout to become the world’s second-largest economy, assisted Zimbabwe during its protracted struggle for independence. Joining the likes of the EU, the US and Britain in the reform chorus, China looks determined to demand accountability from Mnangagwa’s administration. Also joining in the calls for far-reaching reform are multilateral lenders like the International Monetary Fund (IMF), World Bank and the African Development Bank (AfDB). Of note, China is frustrated over how Harare has handled Chinese funds and has implored the government to improve transparency in financial management. This comes after government raided US$10 million of Chinese funds from an escrow account held by a local bank.
The money was part of a loan for the expansion of the Robert Gabriel Mugabe International Airport. As reported by this newspaper on November 1, 2019, China indefinitely suspended financing infrastructural projects totalling US$1,3 billion after the central bank had swooped on the US$10 million from an escrow account which held funds for the project.
Chinese Foreign minister Wang last week joined in the fray, demanding Mnangagwa to implement a comprehensive economic reform agenda pivoted on tackling corruption.
If China dumps Zimbabwe, the country is doomed as most international partners remain on the fence, demanding broad-based reforms.China has remained Zimbabwe’s most trusted partner, having invested billions of dollars in infrastructure development.
While there was renewed hope for international cooperation when President Emmerson Mnangagwa took over from Mugabe in a military coup in 2017, fatigue has crept in as the West and even China find Zimbabwe dysfunctional and difficult to do business with.
The 76-year-old should also learn to keep his friends closer while re-engaging the West which has been at the forefront of demanding economic and political reform.
Mnangagwa, previously viewed as reformist, has failed to take advantage of low hanging fruits like media reform, constitutional alignment and tackling the rot in the public sector.
Political analyst Ibbo Mandaza said government lacked capacity to reform, adding that there was a need to craft a comprehensive reform strategy.
“They lack the capacity to reform and that incapacity is what led to the coup. That incapacity makes government moribund. It is highly unlikely that this government will ever reform,” Mandaza said.
“There is need for clear definition of the reform agenda. Some of us from civil society organisations have put on the table an agenda for reforms for the past three years.”
Zimbabwe is also engaging the EU in a bid to thaw relations after the bloc accused the country of grossly violating human rights. Japan, the world’s third-largest economy, has also expressed concern over Harare’s lethargic approach to tackling corruption.
“The reforms we need as a country should prohibit such conduct. Because government has not taken the steps needed to stamp it out, the international bodies have concluded that government must think that the people with the privileges are too important. But, to the international institutions and foreign governments, this means that Zimbabwe is avoiding reforms that would help millions of people because they might interfere with the profits of just a few privileged people,” economist John Robertson said.
“Therefore, Zimbabwe is not yet deserving of help. I think the belief is that we will make the needed changes only when we become much more desperate and government has to contend with much more serious social unrest.”
As part of the roadmap towards arrears clearance, the government signed up for a Staff-Monitored Programme (SMP) with the International Monetary Fund (IMF) covering the period May 15, 2019 to March 15, 2020 with quarterly performance reviews. The SMP seeks to assist the country to implement key reforms.
But the SMP is in limbo amid efforts to re-calibrate the agreement after government failed to adhere to the letter and spirit of the initial deal.
Due to the slow pace of reforms, Zimbabwe could lose out on a US$500 million AfDB facility for arrears clearance.