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Zimbabwe: Mnangagwa secures 2nd term amid severe economic crisis

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Picture: Philimon Bulawayo/REUTERS/Taken on October 25, 2019 – Zimbabwe President Emmerson Mnangagwa attends a rally against Western sanctions in Harare, Zimbabwe. The 2023 elections took place amid worsening conditions for majority of Zimbabweans, in an economy long beleaguered by unilateral sanctions. Zimbabwe was cut off from US$100 billion in grants, loans, and other kinds of support from international and multilateral sources and further lost an estimated US$42 billion in revenues between 2001 and 2019, the writer says.

By Tanupriya Singh

Zimbabwe’s incumbent President Emmerson Mnangagwa was re-elected for a second term in the general elections held on August 23-24. The leader of the Zimbabwe African National Union-Patriotic Front (Zanu-PF) secured 52.6 percent of the votes, according to the official results released by the Zimbabwe Election Commission late on August 26. Zanu-PF also won 136 out of the 209 seats in parliament, falling short of a two-thirds majority.

Mnangagwa’s main contender, Nelson Chamisa from the Citizens’ Coalition for Change (CCC), secured 44 percent of the vote. The CCC has rejected the results of the elections citing discrepancies and “significant deviations from both national and international electoral standards”. Speaking to the press on August 27, Chamisa declared that, “We have the results and we are going to form the next government … we are on a peace offensive, we are on a diplomatic offensive and we are going to take an offensive stance in a progressive and democratic manner”.

This is the second time that the two candidates faced off in an election, the first being the general election of 2018. Chamisa had challenged the outcome then, however, his petition was dismissed by the Constitutional Court. The elections had taken place just months after a coup led to the ouster of President Robert Mugabe and first brought Mnangagwa to power.

“When the majority of the people supported the coup, it was not because they wanted a coup necessarily, but they thought that it was perhaps a tool to move to the next step … they were expecting some kind of democracy, they did not expect that the Mnangagwa government would go to the extreme of the pre-coup government, it was like moving from the pan to the fire,” Ady Mutero, the General Secretary of the United Food and Allied Workers Union of Zimbabwe (UFAWUZ), told Peoples Dispatch.

According to Mutero, while this year’s elections were relatively peaceful, the memory of violence during previous electoral cycles has remained alive in the minds of the people and continued to raise fear, even leading some members of parliament and councillors to flee their constituencies due to intimidation.

He added that there had also been reports of an organisation called the Forever Associates of Zimbabwe moving around and intimidating voters, “almost like running the show, while the ruling party used the army in previous elections, it is now this shadowy organisation”.

“People were craving for political liberties, for their constitutional democratic rights, for fair and reasonable living conditions and a reasonable employment structure in the country — what are we getting now?”

Struggling between sanctions and austerity

In January 2018, the newly appointed President Mnangagwa told the World Economic Forum that Zimbabwe was “open for business” after nearly two decades of isolation, adding that his government would take a look at existing legislation that had “constrained business coming into Zimbabwe”, namely Mugabe’s radical land reform programme and indigenisation laws.

In 2000, the Zimbabwean government began the Fast Track Land Reform Programme (FTLRP), a massive redistributive initiative geared towards correcting the racial inequalities in land ownership entrenched by colonialism. In 1980, 6,000 white farmers controlled 15 million hectares of land. By 2009, over 13 million hectares had been transferred to over 240,000 families, of which the FTLRP was directly responsible for the provision of 9.2 million hectares to 168,671 families.

The response from the US and its allies including the European Union to the FTLRP was swift and brutal. In 2001, the US brought into force the Zimbabwe Democracy and Economic Recovery Act (ZIDERA), cutting off Zimbabwe from external loans and credit as well as blocking the cancellation or reduction of debt, US$700 million of which was inherited from the white supremacist Rhodesian government at independence.

The US expanded the sanctions in the following years “to cover, inter alia, any senior official of the Government of Zimbabwe … or anyone deemed to be supporting the government”, noted UN Special Rapporteur Alena Douhan in a 2022 report. The sanctions, combined with the impact of the IMF structural adjustment policies of the 1990s, hit all critical sectors of Zimbabwe’s economy, including mining, agriculture, and banking, the impact on which was exacerbated by the fact that transactions were taking place in US dollars.

According to Douhan, Zimbabwe was cut off from US$100 billion in grants, loans, and other kinds of support from international and multilateral sources. It further lost an estimated US$42 billion in revenues between 2001 and 2019.

According to recent estimates, over 75 percent of employment in Zimbabwe is in the informal sector. The healthcare system has been plagued by high rates of vacancy, lack of proper infrastructure, and shortages of essential goods including medicines.

“The significant progress that Zimbabwe had made in the development of infrastructure, as well as health, education, and other social service delivery systems has been severely reversed,” the SADC permanent missions in Geneva said in 2020.

The drastic impact on the living and working conditions of the majority of Zimbabweans has been compounded by the economic policies of the Mnangagwa government, encapsulated in the “austerity for prosperity” plan introduced as part of the 2019 national budget. “You cannot talk of austerity for prosperity when the people are already suffering,” Mutero said.

“It is a purely neoliberal capitalist government, they have cut government spending, they are talking of privatisation … You see what is happening in our hospitals … there is corruption, there is policy inconsistency, there is monopoly capitalism, there are cartels in every sector of the economy … the whole of the country is being privatised.”

A few years ago, the government also removed an amendment to the Finance Act, paving the way for foreign entities to be able to assume full ownership of Zimbabwe’s mines.

The growing role of private corporations in agriculture has seen farmers being contracted to plant specific crops, Oliat Mavuramba, a co-ordinator of the Zimbabwe Small Holder Organic Farmers’ Forum (ZIMSOFF), told Peoples Dispatch.

Some of the key issues that ZIMSOFF has been working towards are food and seed sovereignty, rooted in the principles of agroecology. Mavuramba also drew attention to persisting issues such as a lack of proper infrastructure and roads for farmers to be able to transport their produce. When it comes to setting prices for produce, he added, farmers should be able to determine prices.

IMF prescriptions to the government over the years have also consistently called for privatisation, “large fiscal adjustment”, and cuts to the public sector wage bill. “The Zanu-PF today is different from the party of 1980. They have moved to the right, its economic system is being superintended by the Bretton Woods institutions,” Mutero said.

In 2019, the government introduced a new quasi-currency known as the Real Time Gross Settlement (RTGS) or Zimbabwean dollar, ending a multi-currency system that had been in place for a decade. While the RTGS was initially pegged 1:1 to the US dollar, its value soon plunged, taking down with it the salaries of the working class. The value of the RTGS has depreciated by 85 percent against the US dollar in the official market in recent months.

“Before 2017, the average minimum wage was US$550, today, it is around US$150,” Mutero said. While workers’ salaries are paid in RTGS, local traders and shopkeepers demand payment in US$. According to a ZIMSTAT report released in December 2022, over 80 percent of food and other exchanges in the country were taking place in US$.

“It is only in Zimbabwe that you need to earn your salary and then you go out into the street to buy real money in order to trade in your own country … the people of Zimbabwe are being reduced to destitution … If you go to the shop, the price of goods changes every day, you cannot budget. By the end of the month, the employee is walking home empty-handed,” Mutero said.

As of August 28, the official exchange rate stood at ZWL 4,570 to US$1.

Zimbabwe has also continued to witness soaring rates of inflation, often reaching triple digits. Due to the high prices of basic commodities, coupled with the volatility of the Zimbabwe dollar, trade unions in the country have demanded that wages be given in US dollars.

“I am in support of currency sovereignty, but our macroeconomic condition does not support our local currency … Right now, we have one economy that is being run in US dollars and another which is being run in the RTGS.” Prior to this, unions had called for the indexation of wages to the US dollar, so that the wages would be negotiated and set in US dollars, and then paid in RTGS. However, Mutero said, this demand was refused.

Chamisa had pledged a return to full dollarisation if he won the election, which was intended to pave the way for the adoption of the local currency. Meanwhile, in an effort to stabilise the Zimbabwe dollar, the government had introduced gold coins in 2022 and has now also launched a gold-backed digital currency.

Democratic enough for debt relief?

Given that unilateral US sanctions had cut off Zimbabwe from accessing debt relief, the country’s current debt stands at US$17.5 billion, some US$14 billion of which is external debt. Out of this, 80 percent alone is arrears. This has prevented the government from accessing new lines of credit, including from international multilateral institutions such as the IMF.

Since 2022, Zimbabwe has been engaged in talks with its creditors to clear its debts and possibly lift sanctions, with the process being facilitated by the African Development Bank (AfDB, of which the US is the second-largest shareholder). Among the conditions set for the talks were wide-ranging reforms related to the economy, land reforms and compensation, and governance, including commitments to guarantee “free, fair, and credible elections”.

“The full weight of re-engagement with the international community will depend on this. It will depend not just on the election, but the entire electoral process that guarantees a credible election,” AfDB President Akinwumi Adesina had said.

Meanwhile, Zimbabwe is also supposed to muster up US$3.5 billion in “compensation” for white colonial farmers whose land was seized during the land reform program. This is despite the fact that the UK had committed to raising funds, along with its Western allies, for compensation as part of the 1979 Lancaster House Agreement.

A proposal by the Zimbabwean government to pay the amount over 20 years was rejected by the farmers’ organisation, with the agreement now finalised for a 10-year period. The payment is to be made for “development” done on the land, including irrigation and other facilities, and not the land itself.

Meanwhile, the continued imposition of cruel unilateral sanctions based on selective invocations of democratic order by the US has continued to exacerbate economic misery.

“Most of the time, sanctions do not affect the targeted people, they target the general population. The political elite are still able to fly out of the country, they have access to everything, be it health or education, their children are studying in universities around the world. It is our children who are being affected,” Mutero said, adding that the issue of sanctions must not be used by the political class to avoid their responsibilities as the government or to plunder the country’s resources through theft and corruption.

“There is no citizen participation in policy formulation, who are these policies being made for?”

As Mavuramba stressed, “Smallholder farmers must be included in policy formulation so our issues are carried forward

Fighting for systemic change

It is against this backdrop that nearly six million Zimbabweans were set to cast their votes last week. However, according to Mutero, the contending choices in the lead offered little hope of relief.

“It is not that the working people support the policies of the CCC — they are purely neoliberal. Supporting the CCC is like supporting the IMF policies, so why were people supporting that? … They tried through the [2017] coup to try and change the political and economic system in the country, but the people of Zimbabwe were rewarded with more punishment, with the reduction of their wage, the erosion of the pensioners’ income …”

Mutero added further that in terms of policies, “Zanu-PF is actually on the left of the CCC, but the people wanted to vote for the CCC because they wanted to try it … People are resisting but unfortunately, they do not have a political home to fight this system so they tried to vote in what is an equally neoliberal capitalist party with the hope that the economic conditions could be better.”

This was reiterated by Mavuramba, who stated that the opposition was simply a “puppet” of the West.

The electoral results were divided along familiar lines, Mutero said, with Zanu-PF dominating the votes in rural areas and the CCC winning in urban communities. However, he added, “the elections are not a reflection of the people’s desired outcome [for change] –— there are no celebrations across the country, and this is telling”. “It is a peaceful demonstration of displeasure, the people are not accepting the results, it is a shock to the majority of the people even those in the rural areas who voted for Zanu-PF.

“People voted with their stomachs, they wanted change from the free-market system that is breeding corruption, corporate greed, and privatisation — even if the main contending parties are two sides of the same coin. The situation we have today is one where the capitalist system cannot provide for the people without a fight. What is needed is no longer a change of government, but a change of system.”

Speaking to the persisting urban-rural divide in the elections, the general secretary of the Zimbabwe Communist Party, Ngqabutho Mabhena, noted, importantly, that given the fact that neither the CCC nor the Zanu-PF could unite the peasantry and the working class, what is needed is a “mass movement that clearly understands the legacy of colonialism and the liberation struggle, and understands what needs to be done to complete the liberation of Zimbabwe”, including uniting the peasants and the working class to define the nature of the struggle.

Tanupriya Singh is a writer at Peoples Dispatch and is based in Delhi.

This article was first published on Peoples Dispatch