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The Politics of Reform — Much Ado About Nothing
The Politics of Reform — Much Ado About Nothing
Op-Ed / Africa

The Politics of Reform — Much Ado About Nothing

Originally published in Zimbabwe Independent

The call for political and economic reform in Zimbabwe has been a constant refrain for almost two decades.

For Zanu PF, reform necessitates the reconfiguration of the economy and ownership, centred on its controversial land reform and, more recently, indigenisation policies. It is a selective agenda wrapped in revolutionary rhetoric intended to correct discriminatory historical legacies, but that in practice has been employed to buttress Zanu PF’s political hegemony against growing opposition to misrule and to feed political patronage and self-enrichment.

Opposition formations and many civil society groups seek the removal of Zanu PF, calling for reforms that would strengthen governance and the rule of law and tackle the array of democratic deficits that underwrite Zanu PF’s incumbency. For the most part, Zanu PF has rebuffed these calls, accusing its proponents of pursuing a regime change agenda directed by external interests and has employed an array of repressive measures to undermine its opponents, culminating in a terror campaign, the illegitimate June 2008 elections and regional intervention.

The negotiated 2008 Global Political Agreement provided a framework for comprehensive reform, although this was largely avoided; many aspects of this reform were “parked” in the new constitution adopted in February 2013 and remain subject to a contested terrain of constitutional alignment. This includes the reworking of over 400 pieces of legislation and the introduction and/or reconstitution of new democracy-supporting bodies. In addition, several high-profile cases challenging existing statutes have been brought before the Constitutional Court, although numerous issues remain unattended.

The momentum for political reform receded in the face of diminished opposition representation and debilitating internal rivalries.

The Southern African Development Community (SADC), opposition and civil society groupings pointed to an array of reforms that should have been addressed before the 2013 polls, but Zanu PF’s victory enabled these to be pushed aside, instead elevating its own transformation agenda under the policy prescripts of the Zimbabwe Agenda for Sustainable Socio-Economic Transformation (ZimAsset) economic blue-print.

The momentum for political reform receded in the face of diminished opposition representation and debilitating internal rivalries; funded civil society has also recalibrated as the realities of the resuscitated Zanu PF incumbency prompted a move towards constructive engagement, encouraged by donors keen to re-engage. Consequently, robust critique of civil and political concerns has been stifled on multiple fronts, as economic and financial sector reforms have moved centre-stage.

Deteriorating economic conditions have exposed the limitations of Zanu PF’s campaign promises that ZimAsset and/or that government’s “Look East” policy provide realistic options to kick-start recovery. Conditions on every front have in fact worsened. Desperate for new credit lines, the government focused more on reconnecting with international creditors; it introduced a Staff-Monitored Programme (SMP) with the International Monetary Fund (IMF), intended to demonstrate a commitment to repair relations severed by payment defaults and to correct its financial delinquency.

In this regard there has been some progress, although this only lays the foundation for more fundamental reforms that are now required. Indeed, the SMP was not politically taxing, yet provided space for those promoting an incremental engagement agenda to demonstrate that the government was committed to mending its ways, albeit through this narrow lens of reform.

Zanu PF, it was argued, had no choice as economic conditions forced a reality check on its limited available options. President Robert Mugabe’s own broad endorsements for reform, outlined in a 10-point plan in his state of the nation and opening of parliament speeches in August and September 2015, were a tacit admission of his government’s policy failures.

Significantly, he delivered these speeches without his stock allegations that sanctions and Western powers were responsible for Zimbabwe’s impoverishment. His support enabled Finance minister Patrick Chinamasa and Reserve Bank of Zimbabwe governor John Mangudya to present government’s reform strategy to development partners and creditors in October 2015. The plan set out an incremental agenda that would secure funds to pay debt arrears (estimated at almost US$2 billion) by mid-2016, which would enhance prospects for accessing new lines of credit. It was well received but, curiously, not shared with ordinary Zimbabweans, until it was leaked four months later.

The timeline for arrears repayment has already shifted and is contingent on accessing new loans that creditors must have confidence will be honoured. This process must also be complemented by “bold policy reform measures aimed at debt sustainability and improving the socioeconomic environment”. The IMF acknowledges progress in some of these areas, but continues to highlight key issues that require urgent government attention. These include:

  • Reducing the civil service wage bill and re-orienting spending priorities;
     
  • Improving debt management and administration of revenue administration;
     
  • Improving the business environment, including clarity on indigenisation provisions and land reform (including a framework for compensation) and improved transparency in the mining sector;
     
  • Reform of state owned enterprises; and Tackling corruption.

Reform in these areas is hampered by acute resource constraints, and as economic growth slows, the government is being squeezed on every front. While trying to raise funds to underwrite payments for its debt arrears, it has been forced to borrow heavily elsewhere, simply to keep the state functioning and to finance its ballooning budget deficit, exacerbated by a worsening balance of payments crisis and an unsustainable wage bill for public servants.

Limited success in reducing expenditure in some areas belies the fact that over US$2 billion of Treasury Bills have been issued to keep the wheels in motion. This means government must now find an additional US$250 million annually to service this new debt. This deficit is also at the heart of a crippling liquidity crunch that has further undermined confidence in Zimbabwe’s shaky banking system.

Even if financing to cover debt arrears is secured — by no means straightforward or at this stage guaranteed — progress in these reform areas will determine prospects for the approval of new loans. The IMF executive board meeting with the World Bank and African Development Bank last month was expected to assess progress, but conditions are not in place to secure new lines of credit at this juncture. Unlike the SMP, there must now be substantial headway around issues such as civil service cuts that have thus far been avoided. Although technically not engaged on a political platform, progress around sensitive law and order, governance and human rights issues will be required to secure US buy-in.

But headway in these areas is patchy at best, and unlikely to be pursued with any vigour in the run-up to elections, which explains why many are sceptical and believe it is premature to discuss new funding. Government is trying to tick the requisite boxes by meeting with civil society and business groupings, but this has not arrested depreciating levels of confidence. Indeed, there is a strong feeling that the “theatre of reform” belies a political agenda to retain political hegemony.

An assessment of progress therefore requires a more robust assessment of major implementation challenges.

Limited success in reducing expenditure in some areas belies the fact that over US$2 billion of Treasury Bills have been issued to keep the wheels in motion.

Civil Service Wage Bill

The wage bill for civil servants, including those attached to the security and intelligence sectors, has grown dramatically, in turn preventing much-needed expenditure on public investments and social services. There is still considerable ambiguity about the size and make-up of the civil service and where cuts will be made.

How government addresses this challenge will be a primary indicator of its intent. But progress, even of an incremental nature, appears to have been made only glacially since the promises by the finance minister in December 2014.

In mid-April 2016, Chinamasa told the IMF that the government would retrench workers and freeze salaries as part of its strategy to reduce the wage bill to 50% of total expenditure by 2019. What this means in practice remains unclear and has already been contradicted; at Independence Day celebrations, Mugabe promised civil service salaries would be increased to match the poverty datum line. And Public Service, Labour and Social Welfare minister Prisca Mupfumira told a gathering on Workers Day that there will be no job cuts.

It is difficult to see how government will cut public spending, lay off civil servants and privatise state-owned enterprises (with accompanying job losses) ahead of the elections, leading some to suggest that progress on this front may be delayed until after the polls. But the wage expenditure, now estimated at 83% of government expenditure, continues to tighten the noose around government, as evidenced by its increasing difficulties in honouring due payments timeously. This has exacerbated tensions with what remains the country’s last bastion of formal employment.

Indigenisation

The implementation of Zimbabwe’s indigenisation and economic empowerment legislation and its regulatory framework remains a litmus test for government reform. Introduced in 2008, the controversial legislation, designed to promote and impose indigenous Zimbabwean ownership of foreign firms, has been central to Zanu PF’s economic transformation agenda and an important tool in its populist posturing. But there has been a consistent and “wide disjuncture between the law (as it is), government pronouncements of the law (as they would like the public to believe it to be) and the policy in practice”. This confusion was identified as a central obstacle by donors and international financial institutions, who have consistently called for “clarification” on key aspects of the law.

A commitment to “simplify and streamline the investment process” was included in the government’s Lima strategy for clearing debt arrears and carrying out supportive economic reform. But following his appointment in September 2015, Youth and Indigenisation minister Patrick Zhuwao who is also Mugabe’s nephew, vehemently contradicted efforts by Chinamasa to provide this clarification, at one point threatening to expel companies and seize their assets if they did not comply.

Mugabe allowed the confusion to prevail until mid-April 2016, finally reining Zhuwao in, acknowledging the confusion must be resolved and that a “one-size-fits-all” approach to indigenisation would not be adopted. He promised the confusion would be remedied, but another verbal commitment brought neither clarity nor certainty, instead highlighting “deep policy flaws and inherent confusion in government”.

How the legislation and its accompanying regulations are amended will be watched closely. Thus far, Zhuwao has sat on his hands in what several local economists have described as wilful resistance, an approach Mugabe either tolerates, endorses or is unable to control. In the current economic quagmire, repealing the indigenisation law and replacing it with a coherent framework would significantly strengthen the reform agenda, but such a move is unlikely to pass political muster.

Land Reform and Compensation

How issues of property rights, compensation, unresolved issues of legal and illegal occupation and clarity on beneficiaries of the fast-track land reform programme are dealt with remain key indicators of the government’s commitment to strengthening the rule of law. The government acknowledges that resolving these matters is central to prospects of boosting productivity on the land.

In mid-March 2016, Chinamasa tabled a memorandum in parliament establishing a special fund responsible for raising and administering compensation for seized land. This is an important symbolic attempt to demonstrate government’s commitment to compensate farmers evicted during the fast-track land reform programme. If successful, this could also help expedite unresolved tenure issues. The state points out it has never denied its responsibility to compensate, but for what and at what rate has never been clarified. The suggested compensation plan would entertain claims for land, improvements and equipment, signalling a major shift in government policy if adopted.

Angry protesters barricade the main route to Zimbabwe's capital Harare from Epworth township after the government announced a hike in fuel prices, on 14 January 2019. AFP/Jekesai Njikizana
Q&A / Africa

Revolt and Repression in Zimbabwe

The Zimbabwean government’s decision to hike fuel prices has sparked fierce opposition. In this Q&A, Crisis Group’s Senior Consultant Piers Pigou explains how economic hardship is driving ordinary citizens to unprecedented acts of resistance.

What triggered this explosion of unrest?

On 12 January, in response to persistent fuel shortages compounded by manipulation and mismanagement of a currency crisis, President Emmerson Mnangagwa announced a fuel price hike of over 200 per cent to $3.31 per litre – making the country’s petrol price the highest in the world. It is unclear how this move would address the shortages, outside of pricing fuel out of the reach of many; already, the knock-on effects of transport and commodity price increases are adding evident stress to ordinary Zimbabweans’ lives.

The massive rise sparked a general strike, along with widespread protests, which in many areas was characterised by violence and considerable destruction of property. Those behind the strike did not call for demonstrations, but thousands, especially young people, took to the streets, with many looting shops and burning cars or buildings. Protests were concentrated in and around the main opposition strongholds, the capital Harare and Bulawayo, but also appeared in cities elsewhere across the country. In turn the government ordered a vicious clampdown – deploying soldiers as well as police.

At the end of the second day of protests on 15 January, Zimbabwe’s Doctors for Human Rights released a statement saying “hundreds shot, tens estimated dead in rampant rights violations across Zimbabwe”. Their assessment included reports of 107 patients treated for gunshot and blunt trauma wounds. For days after that, it was hard to obtain updated casualty figures. The government blocked internet services, both at the outset of the unrest and again on 18 January, severely disrupting the flow of information and contributing to widespread confusion.

The scale of violence is the worst the country has witnessed in some time.

On 18 January, the Zimbabwe Human Rights NGO Forum was able to publish consolidated statistics counting 844 human rights violations during the general strike. These numbers include: at least twelve killings; at least 78 gunshot injuries; at least 242 cases of assault, torture or inhumane and degrading treatment, including dog bites; 466 arbitrary arrests and detentions; and many displacements (with the number being verified). Other violations are invasion of privacy, obstruction of movement, and limitation of media freedoms and access to information. 

Protesters have also engaged in intimidation, violence, vandalism and looting. The government confirmed that they stoned one police officer to death; there are several unconfirmed reports of fatalities and injuries among the security forces. The extent of the property damage has yet to be determined, though human rights groups have documented at least 46 instances. The country’s main cities are at a standstill.

The government and media have accused the opposition Movement for Democratic Change (MDC), trade unions and civil society groups backed by foreign funders (the U.S. and Germany were named) of orchestrating the protests as part of a campaign to undermine the government and elevate the MDC’s leader, Nelson Chamisa, into office. Such accusations are par for the course when the government faces protests; based on past experience, it seems unlikely it will supply compelling evidence to support these claims.

Did the unrest come out of the blue?

Anger at the government has been building for some time. On my last visit to the capital Harare in December 2018, the country’s economic woes were plain to see. Prices in shops were soaring, retailers were closing down and queues for petrol were lengthening as the country struggled to juggle payments for competing import priorities. Control over the country’s fuel supply is in the hands of the ruling Zimbabwe African National Union-Patriotic Front (ZANU-PF), and the huge financial benefits that come with it are reportedly causing factional rivalry. There is widespread public speculation that the shortages are caused by inter-elite squabbles or even deliberately engineered.

People in Harare complain that the administration is akin to a new driver in an old taxi.

The price hike thus ignited the already dry tinder on the ground. On 13 January, one day after the announcement, civil society groups backed a call by the Zimbabwe Congress of Trade Unions for a three-day “stayaway”, or general strike.

Underlying the skyrocketing prices of fuel, food and other goods is a currency crisis that has been worsening through much of 2018. In 2009, facing similar hyper-inflation, the government abandoned the national currency, and switched the economy over completely to the U.S. dollar. After an election in 2013 in which it ran on a platform of job creation and economic recovery, the ZANU-PF government demonstrated astonishing levels of financial delinquency. It “financed” its own systematic over-expenditure with massive borrowing. Domestic debt, which stood at just $442 million in 2013, surged to $10.5 billion by February 2018 and has climbed further over the last year. In 2016, as more and more dollars drained out of the economy, the government introduced a new “bond note” currency, nominally at parity with the dollar, in an attempt to make up for cash shortages, as well as direct electronic payments into bank accounts for goods and services. These payments included the salaries of civil servants, the last bastion of formal employment. It was the equivalent of printing money over and above the value of the reserves in the central bank.

The government continues to claim parity between the bond note, electronic balances and the dollar. With most financial transactions being cashless, this mythology of official parity was maintained, although the bond notes and electronic reserves were trading at a lower rate. But both the latter quasi-currencies have rapidly depreciated since the government introduced fiscal and monetary reforms in October, leading prices for goods and services to spike across the board. The runaway inflation in turn has prompted panic buying and widespread shortages of critical goods such as medicines. It has cut the value of ordinary citizens’ earnings and savings by more than half, further impoverishing an already struggling populace.

In the weeks following the fiscal reforms, as purchasing power evaporated, the entire public-sector work force began organising to confront the government. Since early December, Zimbabwean doctors have been at loggerheads with the government, crippling central parts of an already degraded health care system. On 8 January, the Apex Council, an umbrella body representing civil servants, issued the government the statutory two-week notice that it would call a general strike to protest the government’s refusal to pay civil servants in hard currency, namely U.S. dollars.

Is there precedent for this level of violence accompanying protests in Zimbabwe?

The scale of violence is the worst the country has witnessed in some time. Before 1 August 2018, when the military shot dead six civilians in Harare, Zimbabwe’s security forces did not use live ammunition in crowd control. Now they seem to rely on it.

In another escalation, the government has deployed the military to suppress protests and make arrests, highlighting the ineffectiveness of the police or, as some believe, that the government does not trust the police to crack down on protests with sufficient fervour. The response also reflects an embedded military influence in government decision making and could usher in a new phase of repression in Zimbabwe.

Nor has the country seen a comparable level of violence, looting and destruction by ordinary Zimbabweans. Some of it is undoubtedly orchestrated, but most appears to be spontaneous. More than ever, young people are willing to confront the government in the streets, reflecting desperation and their deep-seated frustration. Anecdotes are surfacing of huge sections of road being shut down and railway carriages being dragged off the rails and into the streets, signaling new levels of revolt. Such actions suggest a growing number of Zimbabweans are less risk averse in terms of a confrontational approach, adding a highly dangerous new element into the mix.

Just fifteen months ago, a coup forced strongman Robert Mugabe from office. Wasn’t Zimbabwe full of hope then?

The optimism that accompanied the ouster of long-time President Robert Mugabe in November 2017 has evaporated. For a time, many Zimbabweans thought his replacement, Mnangagwa, might be a reformer, though he had long been a ruling-party stalwart who was Mugabe’s vice president. The international community, including a number of critics, were prepared to give him the benefit of the doubt. Now, however, cynicism is growing in many quarters, albeit for diverse reasons. There are signs of discontent even among ZANU-PF loyalists and members of the security forces, who are also bearing the brunt of economic decay.

Controversy blighted Zimbabwe’s much anticipated elections on 30 July 2018, even though the courts endorsed the outcome. Many believe that the use of state resources in Mnangagwa’s favour pushed him over the finish line in the presidential contest. Unprecedented spending by the government ahead of the elections contradicted promises of financial prudence. The MDC refuses to recognise Mnangagwa’s government as legitimate, while the government accuses the opposition of being unpatriotic and promoting a nefarious regime change agenda. The country is polarised, attitudes on both sides have hardened and prospects for bridge-building have withered.

Since the elections, the new government has managed to deliver few tangible results. People in Harare complain that the administration is akin to a new driver in an old taxi. Many see the government simply as a reconfiguration of the ZANU-PF, now freed from Mugabe but dominated by security-sector interests and factions aligned to the new president.

Questions are also surfacing over President Mnangagwa’s judgment. He left the country immediately after announcing the fuel price hike, ostensibly to search for trade deals in Russia, Belarus, Azerbaijan and Kazakhstan. But such deals are unlikely to resolve the immediate economic issues facing Zimbabwe: while he may drum up some foreign investment in the country, those governments will not provide much needed budgetary support. Nobody believes that Mnangagwa will enjoy anything like the enthusiastic reception he got last year if he goes, as planned, to this year’s World Economic Forum in Davos.

Already in December, one of Zimbabwe’s leading political scientists was telling me that “the light at the end of the tunnel has gone out”. He meant that Mnangagwa’s government, while consolidating its authority politically, would be unable to deliver a sustainable, broad-based economic recovery.

[F]urther unrest in the coming days, weeks or months is a question of when, rather than if.

What could happen next?

For almost two decades, observers of Zimbabwe have warned of pending economic collapse, mass hunger and social implosion. Conditions steadily worsened, but Zimbabweans employed an impressive array of survival strategies, from emigration producing diaspora remittances to work in the informal sector, where “making a plan”, as per a common expression, has become something of an art form. The apparent stability has fed complacency, a sense that Zimbabwe can keep on bumping along the bottom. But evidence on the streets now suggests that may no longer be true.

The security clampdown is continuing. Notwithstanding its chilling effect on some potential protesters, further unrest in the coming days, weeks or months is a question of when, rather than if. Another initiative for a general strike is already in motion; calls for a “Stayaway 2” on 23-25 January are circulating on social media. Key questions are how organised it will be, given the likelihood that many organisers of the initial street actions are detained, and how the state will respond. Already, there is a de facto nationwide shutdown as towns and city centres remain empty. People cannot move freely because transport is too expensive. Many cannot afford to go to work.

Zimbabwe desperately needs reform if the government is to keep the country reasonably stable and preserve its re-engagement with international donors

At the same time, the information gap makes it difficult to judge what is happening. Amid endemic misinformation and fake news, some exaggeration of the country’s disarray is likely in play. But in any case, it is unlikely that the mood of confrontation will dissipate quickly. The government may be able to put a lid on unrest and take activists off the streets, but that will not address the conditions that have brought people out. More confrontational protests seem inevitable even if the crackdown curbs protests for now.

What should outside powers do about Zimbabwe’s crisis?

The biggest challenge at this juncture is to get the government to do something about the unrest besides shoot and arrest protesters. Zimbabwe desperately needs reform if the government is to keep the country reasonably stable and preserve its re-engagement with international donors, a process that started with Mugabe’s ouster. To pull off that reform, it needs broad political consensus, including within both the ruling party and the opposition, but also within other social constituencies. The country is polarised on multiple fronts – ideally the government would commit to supporting the development and implementation of some form of national reconciliation strategy to at least start to heal these divisions. For now, however, such a strategy is not even part of political discourse.

It is unclear, however, who has the leverage to nudge the government from repression to reform – or if anyone wants to do so. In the neighbourhood, the Southern African Development Community did not immediately respond to the unrest. Wider international reaction has been muted. Civil society groups have expressed concern and diaspora groups have marched in Johannesburg. But the South African government, traditionally engaged in Zimbabwean politics, has downplayed the situation. With the prospect of more bloodshed and large-scale refugee flight, the region, and indeed the world, cannot afford to ignore the crisis.