Tycoons hobnob with Zanu PF elites

via Tycoons hobnob with Zanu PF elites – The Zimbabwe Independent March 13, 2015

Local corporate-political interface, which is usually hidden, is now slowly emerging and becoming clear in Zimbabwe as Zanu PF’s factional fights expose the ruling party’s nexus with business.

It seems corporates in Zimbabwe — including some companies that would want to be seen as brands not hobnobbing with or subsidising dictatorship when they are actually doing just that — have to be in good books with President Robert Mugabe’s party, more specifically serve the interests of whichever faction has an upper hand at any particular moment in order to survive and safeguard their main objective — profit.

The dismissal of former Vice President Joice Mujuru from government and her party has sent shivers down the spines of the business community, with corporates believed to be aligned to the deposed influential Zanu PF leader fearing a targeted crackdown.

Already, a protracted shareholder dispute in Telecel Zimbabwe has hogged headlines amid indications chairman James Makamba and his allies believed to be aligned to Mujuru are being pushed out to make way for new investors aligned to First Lady Grace Mugabe’s camp.

Telecel was licensed by Mujuru in 1998. At the time she was Minister of Information.

As reported by the Zimbabwe Independent last week, government is cracking down on leading multi-franchised automotive dealership, Croco Motors, over its real or perceived links to former vice-president and her late husband, retired army commander General Solomon Mujuru, by cancelling contracts, refusing to settle its dues and unleashing tax authorities on it.

Top government and Zanu PF insiders said the move is part of a clampdown on companies linked to Mujuru’s family and her political faction. Croco Motors has denied any links to Mujuru.

In a typical “you scratch my back I scratch yours” scenario, companies are also forced to fund government and Zanu PF activities for fear of victimisation or for mutual benefit.

The situation is not peculiar to Zimbabwe as other countries have their own networks in terms of how business relates to the powerful elite.

One of the chapters in Richard Calland’s 2006 book Anatomy of South Africa, Who Holds the Power? shows how power and money related during South African President Thabo Mbeki’s era.

In the book, Calland explores the relationship between the late white businessman Brett Kebble, and the ANC government.

“As Noseweek (South African investigative magazine) also pointed out, Kebble uses the ANC Youth League (ANCYL) as his passport into the charmed world of black empowerment,” reads part of Colland’s book.

Kebble was known to finance a number of ANCYL programmes.

Colland argues South Africa has what is called compradorism (black Africans being in league with imperialism or Arabism), which relies on the established capital. It typically does not accumulate its own capital through productive processes, but relies on special share deals, black empowerment quotas, fronting, privatisation and trading on access to power being its real piece of capital.

Recently, Zanu PF deputy secretary for youth affairs Kudzai Chipanga urged Grace to crack the whip on companies that refused to donate to Mugabe’s lavish birthday bash held in Victoria Falls last weekend.

Chipanga singled out Schweppes Zimbabwe Limited, which he alleged refused to donate cash and bottled water as requested by the youths.

Zimbabwe’s largest telecommunications company Econet Wireless Zimbabwe in July 2014 gave the cash-strapped government a US$30 million facility last year to pay civil servants salaries and other critical bills.

Econet is just of the companies that have bailed out government openly over the years. Some do it secretly.

In February, media reports indicated government formally approached sugar producer Tongaat Hulett for a US$30 million loan to fund the completion of Tokwe-Mukosi Dam in Chivi.

Tongaat Hullet has been at the centre of an indigenisation storm in which some government official accused it of using its political ties to remain majority owned by foreigners.

Economic analyst Takunda Mugaga said the country is in a sorry state, partly because of the corrupt collusion between business and politics.

Mugaga said some business owe their existence to political patronage. In some cases, the businesses create dirty cartels to impoverish Zimbabweans.

“There is no need to sympathise with some of these businesses that are being targeted because they were not honouring their obligations using the Zanu PF fist to silence voices of reason,” said Mugaga, adding they have just lost favour with the powers that be.

He said some of the businesses clearly have unsustainable business models and only rely on their relationship with Zanu PF.

Mugaga argued the economy is losing more than US$1 billion annually through tax evasion, transfer-pricing and unprocedural awarding of tenders to these undeserving companies.

MDC-T spokesperson Obert Gutu said the Zanu PF regime operates along mafia lines where it’s either you are in their camp or you are the enemy.

He said there’s no middle of the road approach or neutrality.
“If you are deemed not to be in their camp they will throttle and literally suffocate your business, you will not get any contracts and tenders if you are outside their camp,” said Gutu.

“They will ruthlessly clamp down upon your business operations until you go bust. Even if you are a lawyer, no matter how good you are, you can forget about getting any legal business from a parastatal if the regime classifies you as a political enemy.”