Being an election year, 2018 was always going to be an interesting one given that the poll would be the first in the country’s post-independence history without former president Robert Mugabe’s name on the ballot.
News in depth BY KUDA CHIDEME
Mugabe had superintended over disastrous policies, which left the once promising young democracy highly polarised, unable to deliver basic services to its people, chocked with excessive levels of debt and unemployment and without a currency of its own.
The election would be a turning point for the southern African nation left in ruins.
However, early into the year, government was confronted by an unexpected incident of striking nurses who threatened to cripple the country’s health care system unless their demands for a wage increase were met.
The government’s response was to fire all the striking nurses, sending a strong message to all in the public service that it would not tolerate such actions.
The nurses were later rehired, but it was a sobering episode.
Election fever gripped the country with the two front runners anchoring their campaigns on the economy.
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The youthful Nelson Chamisa, who represented a coalition of opposition parties promised to modernise the country’s infrastructure and even went on to share his dream of a country with world class “spaghetti roads” in place of the potholed strips that we have.
So “far-fetched” was Chamisa’s dream that he was ridiculed, becoming the butt of jokes on social media.
Emmerson Mnangagwa on the other end tried to carve himself out as a pragmatic reformist with an understanding of business.
He went to town talking of opening up the economy, re-engaging and integrating Zimbabwe into the community of nations.
While on the campaign trail, Mnangagwa signed numerous deals and attended ground breaking ceremonies of several mines and factories, which were all highly publicised by the state media and trumpeted as evidence to the claim that “Zimbabwe is open for business”.
It is at this point that Mnangagwa’s team made startling claims that the country had attracted a staggering $12 billion in foreign direct investment (FDI). It was all a lie. Zimbabwe only attracted $470 million worth of FDI during 2018.
The election was conducted in a largely peaceful environment but the result was contested, resulting in violent protests, which saw six people being shot dead by the army.
A full Constitutional Court bench would go on to uphold Mnangagwa’s wafer thin victory.
While all this was happening, business just like everyone else, was kept on the edge, guessing which direction the country would take.
Mnangagwa went on to announce his Cabinet, which was widely commended for including youthful figures and a number of technocrats.
Mangaliso Ndlovu a 39-year-old was appointed Minster of Industry and Commerce deputised by Bulawayo-based businessman Raj Modi.
To head treasury, which is probably the most difficult job in the country, Mnangagwa appointed Mthuli Ncube an economics professor who was domiciled in Switzerland.
Ncube’s CV is more than impressive; he has authored 14 books in economics and finance, and holds a PhD in economics (mathematical finance) from Cambridge University.
He has an extensive background in banking, having run a local bank and even rose up the ranks of the Africa Development Bank to become its vice-president and chief economist.
There was no doubt that he had played at the highest level of the game.
From being a favourite, Ncube would become a foe overnight after his first policy announcement — an increase in the tax levied on electronic transactions to 2% per transaction from the previous 1 cent for every dollar transacted.
The 2% tax coincided with a central bank directive instructing banks to ring fence hard currency deposits from Real Time Gross Settlement (RTGS) and bond note balances. This was an admission that the two did not hold the same value.
What would follow was a succession of crises as businesses tried to offload their RTGS holdings, the parallel market flourished and the Zimbabwe Stock Exchange spiked with market capitalisation going beyond $20 billion.
In the unique case of Zimbabwe, a spike on the equities market is not usually a good indicator, but a reflection of increasing uncertainties and a lack of confidence in the economy.
As the value of the bond note and RTGS balances plunged, panic grew, inflation started to tick — prices spiralled out of control and as a result, some retailers failed to restock.
Individual savings became worthless and company balance sheets were eroded. It was a bloodbath.
A number of players went out of business while some temporarily suspended operations hoping the situation would improve.
In typical Zanu PF fashion, government refused to shoulder responsibility for the chaos instead choosing to blame “unscrupulous businesses and faceless saboteurs bent on spreading panic on social media”.
At one press conference after another we were told that the situation was okay.
“There’s no need to panic,” insisted Energy Mutodi, a failed rhumba musician who is now the deputy minister of Information.
“What we’re seeing is simply the result of speculative behaviour. People started to hoard. But this should normalise in the next few days.
“Zimbabweans need to know they are safe under Zanu PF. The government is committed to reforms, so we need people to really be patient.”
The lying went on unabated as government maintained the myth that RTGS balances and bond notes held the same value with the greenback.
To try calm an unnerved market central bank governor John Mangudya came out talking of “facilities” from his favourite bank, Afrexim.
“We are finalising our loans commitments. Afreximbank has said they will give us $500 million, which we are still working on. We are also still working on other facilities, the PTA Bank is also assisting us,” Mangudya said.
Afreximbank, has been the go-to bank for Mangudya whenever crisis strikes. But detail around the “facilities” is always sketchy and scant.
This December, Mangudya also made claims that the bank had loaned the country $1,5 billion.
Of that amount, $500 million was meant to stabilise the country’s depleted nostro balances, to enable Zimbabwean companies to meet their external payments obligations while the balance was to ring fence foreign investments.
Mangudya also spent a great deal of the year talking of more “facilities” dedicated to procuring fuel.
While business has been at a standstill with would be productive hours being spent in fuel queues Mangudya and his counterpart Energy minister, Jorum Gumbo competed to assure citizens that the country has enough fuel supplies.
Given his utterances, it would appear like Gumbo has a difficult relationship with the truth. He served as Mugabe’s Transport minister.
Under his watch over the portfolio in charge of numerous multi-million dollar projects, corruption became palatable in parastatals that reported to him.
“As far as my ministry is concerned, we have got enough fuel stocks in the country and we continue to pump, we have not stopped pumping fuel in the country,” Gumbo said.
For what the new year may bring: may the government turn a new leaf and allow an environment free of deceit and where business can flourish.
