Mugabe cabinet delay affecting economy

By John Kachembere

HARARE – President Robert Mugabe’s continued delay in announcing a new Cabinet has caused anxiety in the economy. Mugabe (89), who won the disputed July 31 election with a 61 percent vote, is yet to appoint a new Cabinet — a move which analysts say intensifies economic stagnation. 

The southern African nation’s economy — which showed signs of life, growing by an average of seven percent annually under the government of national unity that was formed in 2008 after a contested election — has begun to wean off.

Respected economist John Robertson said Mugabe’s failure to initiate investor-friendly policies as well as announcing a new Cabinet has caused apprehension in the economy.

“At the moment, no one is aware of where the economy is going. There hasn’t been a clear enunciation of policies that will take the economy forward,” he said.

Robertson noted that the current economic inertia is being caused by the people’s disappointment in the election results.

“All investors were expecting that the MDC will win and bring with it new policies that are friendly to business.

“However, we still have a hostile business climate and no one is willing to put their money in an environment full of uncertainty,” he said.

Zimbabwe’s equities market, which plunged 11 percent immediately after the announcement of election results — its biggest one-day decline since 2009 — has failed to find direction since then as foreign investors are taking a wait-and-see approach.

Government was recently forced to slash this year’s economic growth forecast from 5 percent to 3,4 percent due to elections, low aggregate demand in the economy, falling metals prices and drought among other factors.

With the country’s economic indicators painting a gloomy picture, analysts say Zanu PF seems more determined to worsen an already messy situation as opposed to coming up with the correct economic remedies that could take us forward.

Last month, Zimbabwe’s long-serving president threatened to expel foreign-owned companies over what he said was the West’s interference in the politics of the country he has led since 1980.

Economist Christopher Mugaga said the wait-and-see approach obtaining in the country is now more of a culture than anything.

“People were waiting for the referendum, elections, and results and now they are still waiting for the cabinet. I don’t think a new Cabinet will change anything because we all know that it’s going to be an all Zanu-PF Cabinet,” he said.

“I think the same old guard will be reshuffled but the indigenisation policy will take centre stage. So really, I don’t foresee the announcement of Cabinet changing anything in the economy,” said Mugaga.

Since winning another term, Mugabe has vowed to push ahead with a black empowerment programme to force foreign and white-owned businesses to cede 51 percent ownership to black Zimbabweans.

Some economists warn that the programme will trigger another economic downturn similar to what Zimbabwe suffered after the Zanu PF government violently seized white-owned farms in 2000.

Mugabe, however, says the economic plan to force black control of companies will create jobs and economic growth that had been hindered by what he called “a tenuous and fraught coalition with uneasy partners” in the opposition led by former Prime Minister Morgan Tsvangirai.

The MDC leader favoured attracting Western investment during the five-year coalition forged by regional leaders after the last disputed elections in 2008. Mugabe says Britain has opposed black empowerment because he forced thousands of white farmers to surrender their land.

Critics of the programme say it disrupted Zimbabwe’s agriculture-based economy, shut down industries and scared away foreign investment in mining and other businesses. Daily News