Source: Govt’s growing paranoia worsens turmoil – The Zimbabwe Independent May 10, 2019
GOVERNMENT’s growing paranoia over the possibility of fresh civil unrest on the back of the current economic turmoil underlined by a wave of price increases signals the need for robust action in implementing far-reaching economic and political reforms to set the economy on a recovery path.
BY NYASHA CHINGONO
Rather than worrying about the possibility of a new wave of protests following the deadly January 14 clashes between the security services where 17 people were killed, government should quickly act on the deteriorating economy which is already conjuring memories of the dreadful 2008 hyperinflationary period.
While analysts agree that the road to recovery would take longer than anticipated and that biting austerity measures are needed to kick-start the economy, government has lacked the political will to deal decisively with economic cancers like patronage, corruption and mismanagement.
Zimbabwe is also in need of significant investment but government’s lack of policy consistency has made the country an unattractive investment destination.
The country inflation rate peaked to 66,8% in March 2019 from 59,39% the previous month, the highest since the 2008-2009 hyperinflationary era that led to the decimation of the Zimbabwean dollar, indicating a deepening economic crisis.
Following reports of growing public discontent, the country’s security services have been placed on high alert to quell possible uprisings.
Home Affairs minister Cain Mathema instructed the Commissioner-General of police Godwin Matanga to put adequate security measures in place to deal with protesters. Another chilling warning was also sent to civil society organisations, accused by the government of plotting against the authorities.
The warnings came at a time Zimbabwe Council of Churches (ZCC) general secretary Kenneth Mtata said the worsening economic crisis had become a national security threat.
The clergyman revealed to the Independent the church warned service chiefs that there was need for an urgent all-stakeholder dialogue to deliberate on how to address the economic crisis if the uprising was to be averted. Last week, Zanu PF issued a warning to MDC leader Nelson Chamisa and the Zimbabwe Congress of Trade Unions (ZCTU) leadership over their threats to organise demonstrations over the deteriorating economic situation.
This has raised the spectre of January 14 protests where 17 were shot dead while President Emmerson Mnangagwa, Vice-President Constantino Chiwenga and Foreign Affairs minister Sibusiso Moyo have come out guns blazing against business over price hikes, making threatening remarks against corporates.
Chiwenga recently described companies’ pricing regimes as “financial terrorism”. Mnangagwa also brandished price controls as a possible weapon of choice to deploy against business, although he said government, as a matter of policy, does not want to go that route, which led to massive shortages and hyperinflation in 2008.
Official statistics have shown that some basic commodities have skyrocketed by nearly 200% during the period between October last year and April this year.
Stephen Chan, a professor of World Politics at the University of London, argues that social unrest alone cannot achieve a change of fortunes on the economic front. He said economic reforms are necessary to attract much-needed investment.
“Will there be civil unrest? Quite possibly. But it will achieve nothing. The country has been led to believe in a false hope that increased foreign investment will solve everything. Firstly, even huge investment won’t be enough to generate sufficient economic growth to repay the loans quickly.
“Secondly, no one will invest in Zimbabwe,” Chan said, adding that Zimbabwe was still considered a high-risk investment destination.
“Quite apart from the shooting of protesters on two occasions after the elections, very visible to the outside world, no major foreign investor considers Zimbabwe has sufficient fiscal discipline to warrant the risk of major investment. In many ways, the irresponsibility of the oligarchs is even more damaging to external opinion than the deaths of protesters,” Chan said.
Zimbabweans have since last year endured biting austerity measures introduced by Ncube as he moved to address fiscal imbalances.
Ncube recently claimed that government finances were sound, but much of it is revenue-induced as a result of high taxes in the form of excise duties, more specifically from tobacco, airtime, alcohol and fuels sub-sectors and also high indirect taxes coming from the 2% tax.
“Government is solvent, we are running surpluses and we have been doing average surpluses of $100 million since September last year when we came in. In January we had surplus of $102 million, February $85,5 million as we had to take into account cushioning of civil servants. In March, our surplus doubled to be just about $200 million,” Ncube said.
Chan said austerity measures were necessary, adding that the long, winding road to recovery would not be easy. He also cast doubt on the possibility of a government of national unity solving problems in the short term.
“Neither the government nor the opposition wish to admit a basic truth about the economy — and that is nothing can be fixed quickly; nothing can be fixed without pain; and nothing can be fixed without a protracted period of deep austerity, while loans are repaid. So a national unity government can do nothing without embracing a very difficult long-term deal with the International Monetary Fund (IMF),” Chan said.
Economist John Robertson said although there were no quick fixes to the economy, policy consistency and rebuilding lost trust were the only way out of the mire.
“Government should have been more deliberate about rebuilding trust from last year. Government has an inclination towards taking property of investors. Even now we see them demanding back mining claims and this is not good for us,” Robertson said.
Political scientist Eldred Masunungure said while the economic crisis is likely to continue into the foreseeable future, protests remain a possibility.
“It is a volatile situation as we speak and it would only be inflamed by a trigger. Unrest is an ever-present danger, anything can happen,” Masunungure said.
“When you reach the point of enough is enough, that is a dangerous point and we are getting there.”
Masunungure added that a political settlement was the only viable solution to the country’s mounting problems.
“The answer lies in the politics. You can see that all on the economic domain has been tried. Why not try a political solution?
We need a political formula,” Masungure said.