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September 14, 2009

Unbowed Zanu (PF) heralds uncertainty

Dianna Games for Business Day

MEDIA reform has been slow in coming to the “new” Zimbabwe. Daily newspaper The Herald, which has acted as President Robert Mugabe’s propaganda mouthpiece over the years, has shown scant sign of support for the unity government and it is sowing the seeds of dissent.

Articles in the past fortnight have lambasted the Movement for Democratic Change (MDC) for trying to get Zimbabwe onto the agenda of last week’s Southern African Development Community (Sadc) summit in the Democratic Republic of Congo. It then praised Mugabe’s “diplomatic victory” in keeping the issue off the agenda. It also thanked SADC leaders for “standing by” Zimbabwe — but failed to mention how not raising issues affecting Zimbabwe’s reconstruction would help the country.

Articles have also praised Mugabe appointee, central bank governor Gideon Gono, for getting 500m from the International Monetary Fund (IMF) — despite the fact it is part of a general disbursement to countries in the wake of the global crisis. It denounced Finance Minister Tendai Biti, from the MDC, for being reluctant to spend the money because Zimbabwe cannot repay even its current debt, on which the release of some of the money is dependent.

It is easy to dismiss this rag but it is the only daily newspaper allowed to print in Zimbabwe. Also, The Herald is the best place to find out what Zanu (PF) is thinking. And the extent of the disunity in the unity government is plain for all to see on its pages.

The IMF money is the latest issue to pit the parties against each other. There are differences in opinion on how this , and other, money could be best spent. Zanu (PF), despite being largely responsible for the decline of the parastatals — the biggest revenue drain in the past decade — wants funding to revitalise them. The MDC is focused on the public sector salary bill while business wants funding to activate economic drivers and regularise the operating environment.

The reaction to the IMF funds raises the question of whether large financial inflows would further divide the fragile government or unite it. Zimbabwe is relying heavily on tax collection as an income stream and despite some success the informalisation of the economy has severely undermined this revenue base.

Capacity utilisation in the private sector has risen to about 60%, up from last year’s 10% to 20%, and regional trade is picking up. But a lack of affordable finance, limited recapitalisation opportunities, power problems and high operating costs are still constraining economic revival.

Political uncertainty is having an effect on the economy — reflected in the slump in the Zimbabwe Stock Exchange in July and August.

The performance at the Sadc summit is not likely to have allayed fears of increased political risk. The old-style rhetoric of Zanu (PF) is not helping either. Justice Minister and Zanu (PF) hardliner Patrick Chinamasa, commenting on Zimbabwe’s reluctance to sign the SA-Zimbabwe investment agreement, said the country would not sign anything that “impinged on the sanctity of land reform” . Another concern for investors is legislation providing for all new investments to have a local majority shareholding.

Sadc is focused on the lifting of sanctions as the answer to Zimbabwe’s problems despite the fact this is unlikely to unlock significant funding. Donors are not lending to Zimbabwe because the parties have failed to live up to the Global Political Agreement, not because of sanctions. In fact most countries are not opening the purse strings. Sadc members themselves, barring SA, have failed to make good on the promise to assist Zimbabwe with a financial package.

With SA handing the chairmanship of Sadc to Joseph Kabila, a longstanding Mugabe supporter, Zanu (PF)’s hand in its standoff with the MDC has undoubtedly been strengthened.

It is a real shame then that President Jacob Zuma could not have done more while SA was still leading Sadc. It is a missed opportunity.