Editorial Note

Except for some fragmentary references to President Mugabe's present health situation in newspapers there have been no concrete reports of his condition. Eddie Cross is of course a Movement for Democratic Change Member of Parliament for Bulawayo and noted economist, and we believe this is a very good overview of the situation in Zimbabwe right now.

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Dr Denis Worrall, Chairman of Omega Investment Research

Yesterday I was in the Karoi District to help the local structures of the MDC organise for a bi-election in two weeks time. On the way back to Harare a huge storm built up over the top end of Mashonaland West – it was a massive front. Clouds towered up to 20 000 feet or more, the clouds were black and at the front of the storm was a band of high winds and some most peculiar lower clouds that were white. Across the open veld of the area and up to the Great Dyke this storm presented a spectacular example of a tropical storm.

At our meeting the weather was calm, almost no wind, the sun shone and we met under some trees in an abandoned building site. For three hours we discussed the way forward and how to handle the bi-election. Then the first wind came up and in half an hour the area was caught up in high winds, breaking trees and flattening crops and lifting roofs. Then came the rain – we could not see 10 metres ahead of us, the road was awash with running water, soon the rivers would be in flood.

In Zimbabwe it feels a bit like that, the sun is shining, there is a gentle breeze blowing – perfect day, but we can sense and even see the storm clouds gathering in the distant hills. What surprised us that afternoon was how fast it came and caught us on the road. These things can come fast and we need to be ready when it does.

Mr. Mugabe stayed in the country right up to Christmas but then took his usual annual holiday of one month in the Far East. He does this every year and the people who saw him at the Unity Day events in Bulawayo on the 23rd December, all remarked how frail and tired he looked.

Then, just after Christmas the Harare rumor mill began to churn – the President has collapsed in Singapore, then “the President is dead”. Even Baba Jukwa – normally an informed commentator on all such things stated that all was not well and that the President may well have died. In our culture it’s wrong to discuss the death of someone who is still alive and the whole thing was played down by the State media and spokespersons.

But then the State media stated that the President had been advised to come home early. Mr. Tsvangirai called on him to return to the country to deal with the economic and political crisis that grips the country. Then came a small announcement that Mr. Mugabe was on his way home and would arrive on the 11th January. No explanation of the three week cut back in his normal break and when he arrived at 07.00 hrs in the morning, there was none of the normal fanfare – lines of officials and Ministers to meet him and pictures of a rejuvenated and relaxed President running down the stairs of the plane.

Since he arrived we have seen nothing of him except for some unusual movement around State House in Harare. The health of the President (now 90 years old) is something that has been of concern for a long time – at least the past decade. However he has always defied the odds and seems to have an uncanny capacity to come back and seem almost rejuvenated from his periodic long flights to the Far East for medical treatment.

But he is 90 and that is a challenge for any person, and he is still Executive President of the country, has a serious crisis in his own Party and is in charge of an economy that is showing all the symptoms of severe stress. Storm clouds are building up on the horizon and we have all got to keep an eye on the storm and watch how it develops. The fundamental truth is that time is running out for Mr. Mugabe and he would be foolish to ignore this reality.

The storm clouds building up over Zimbabwe are made up of a number of different elements. First was the failure to renew the leadership of the new Zanu PF government. It is the same old team of tired men and women that have been in power for the past 34 years. Why he thought that this team would do any better than they had done in the previous decades, is a mystery. They have been in power for 5 months and so far not a single new idea has emerged, corruption remains endemic and there are several signs that certain Ministers and senior figures are still demanding payments for decisions and privileges.

Secondly, despite the overdue acknowledgement that all is not kosher at Marange diamond fields, despite the failure to extract any sort of contribution to the Exchequer from the massive flow of resources emanating from the fields, there has been no movement at all in any direction. Even the national budget announced by the Minister of Finance in December, shows no contribution from the fields. Zimbabwe is on a par with Botswana today in the production and sale of raw diamonds. In Botswana where the operation is conducted in a sound, well managed way, sales of diamonds amount to nearly $4 billion a year and some $2,8 to $3.0 billion finds its way to the Ministry of Finance.

In Zimbabwe where we have to live within our means in fiscal terms, where we cannot borrow or print money, we are struggling with a budget that has not grown in the past 15 months and shows no signs of growth in 2014. Against this background the demands of the Civil Service and the armed forces for a livable wage is simply impossible to assuage. The only way to significantly increase state revenues and therefore expenditure is to harness Marange. If we did so on the same basis as in Botswana, I have no doubt that we could increase revenues to the State by 50 per cent or more.

Then there is the crisis in the wider economy – GDP is not growing; companies in all sectors are closing their doors in the face of harsh operating and financial conditions. Two Banks have closed their doors with the total loss of both their equity and depositors funds, three others are teetering on the edge and should be closed as they are no longer redeemable. That is a quarter of the total number of banks in the country and 10 per cent of the total banking industry.

Capital flight is endemic and runs to billions of dollars since the start of 2013. Inflows are declining and are already at very low levels – someone told me $40 million for the whole of 2013. Liquidity is nonexistent and local firms are unable to borrow to fund their operations. We still lose hundreds of jobs every month. The mining industry is stagnant, the agricultural industry, even with decent rains, is going to contract again and other sectors all show signs of strain. Taken together the outlook is for little or no growth and perhaps some contraction in the economy.

If the succession in Zanu PF is not clearly established before the inevitable happens, many envisage chaos. Certainly the different factions inside the Zanu PF will battle for the succession themselves and the Military might also be a problem – especially if civilian authority is compromised in any way. I thought Mrs. Mujuru spoke brilliantly at the recent funeral of another “National Hero” that has bitten the dust. She clearly controls a majority in the Party, but she knows full well that she will be challenged if the baton does not change hands soon.

Written by Eddie Cross, Movement for Democratic Change MP