There is no sufficient word to describe the last ten months in Zimbabwe. We saw events we never thought we would get to see in this ‘peace-loving’ nation of ours. Each of those events had a profound effect on the outlook of the ordinary citizen. A nation accustomed to hardship in the last two decades dared to believe – hope soared, dipped and ultimately crashed.
The ouster of Robert Mugabe, the attempted assassination by bombing of a head of state, the shooting of unarmed civilians and journalists by the military in the streets of the capital all left their mark on us. We were left wondering what will become of this economy of ours.
Let us look at the early indicators of where we are headed as regards re-engagement with the international community. First, we will look at the indicators that gave us hope.
When president Mnangagwa assumed the role of president, he promised to rejoin Zimbabwe to the international community and make this nation an attractive investment destination. He toured the world with one message, ‘Zimbabwe is open for business.’
He made changes in chase of that promise – in addition to other things, he oversaw the repealing of the investor-chasing indigenisation law which required foreigners to give up 51% ownership of their companies.
Those measures appeared to inspire some confidence in the country:
- The British offered to help cover our debt with the World Bank
- The USA said they ‘would very much like to partner the Mnangagwa administration.’
- Our Chinese friends reaffirmed their intention to work with us
- The IMF sent a delegation to assess the country’s fiscal and economic situation, foreign exchange developments and inquire about the Mnangagwa administration’s economic plans
- Foreigners were buying more shares than they were selling on the Zimbabwe Stock Exchange (ZSE)
- The bond note briefly gained on the dollar.
It should be remembered that most of the parties who said they were willing to work with Zimbabwe expressed explicitly that they would first need to see a free and fair election and the upholding of human rights.
As weeks turned into months, the wild hope Zimbabweans held started to taper off. Cash shortages were getting worse and bank queues proved to be a mainstay. The bond note fell hard and foreign currency could only be acquired on the black market where hefty premiums had to be paid.
Some questionable decisions by the Mnangagwa administration did not help with falling confidence. One example is the special allowance that was granted to civil servants as we approached the election date. It was baffling because we had gotten promises that high government spending was going to be addressed, we had assumed that meant cut-backs.
However, the general sentiment was that once we got free and fair elections, regardless of who won, the international community would swoop in and save the day. This is why some held a little hope.
The elections came and Murphy’s law struck – the worst that could happen happened. Our own military shot down both protesting and non-protesting citizens in the streets of Harare. As videos and pictures of foreign journalists pleading for their lives whilst staring into the abyss that is the barrel of an AK-47, we literally felt the hope escape our frail bodies. We kissed international community re-engagement goodbye then and there.
The election results are being contested and we might see where that chapter ends the day after tomorrow. That may be the case but only a few of us are holding their breaths. The international community has already shunned the events that occurred. This is where it stands:
- International election observers condemned the post-election violence and the EU mission went further as to say the playing field was not level. In short, the international community (especially the West) was not impressed with the election. We can assume they won’t be lining up to engage with us.
- The USA extended its sanctions against Zimbabwe and Mnangagwa. This was likely to happen even if we had had an uncontested election. Some exaggerate the impact of those sanctions whilst some down play them but get the full story on those sanctions here.
- We can forget about the IMF and the World Bank opening up new lines of credit. Even the African Development Bank faces penalties from the US if it clears some of Zimbabwe’s debt. We will find out in time whether or not the look-East policy will be able to offset the challenges we will face because of the sanctions.
- What we can count on however is the Chinese staying on the table. China says they noted the post-election violence but say, ‘the election was generally peaceful and orderly.’ They in turn called for Zimbabweans to respect the vote result. China is all in. We can assume similar sentiments in the East so we are not completely alone out here.
- There hasn’t been any abnormal activity on the ZSE apart from what can be expected when speculators try to make a quick buck. Yesterday, the 21st of August, foreigners were net-buyers by just over $1 million. The day before that they were net-sellers. All this whilst everyone knew about the Constitutional Court hearing which is currently under way.
That should be enough to paint the picture of where we are as regards international re-engagement. To those that might feel like this is not Techzim material I leave you with a quote from Strive Masiyiwa (founder and chairman of Econet),
When sanctions hit the country, every credit line disappeared. You could not talk to anyone, they were shutting down…For us as a business, there was one institution that remained and it was Afreximbank.
Yes, the same Afreximbank which has supported the Zimbabwean government in various ways. They are best known in Zimbabwe for the bond note facility which backs our quasi-currency. They’ve opened multiple credit lines to the country as the West looked away.
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