New cabinet offers little hope for Zimbabwe

BY RAY NDLOVU AND SIMBA MAKUNIKE

PRESIDENT Robert Mugabe’s choice of a new cabinet composed mainly of members of the old guard in his Zanu (PF) party is likely to prompt a tightening of the noose around his opponents, but offers very little hope of lifting Zimbabwe out of the economic doldrums. 

Economic observers have warned of a likely return to economic collapse, which was at its height in 2008 after the country had been brought to its knees by hyper-inflation and the defunct Zimbabwean dollar.

The economic challenges that lie ahead for the new administration include a militant public workforce pressing for pay hikes and decade-long targeted sanctions imposed by the West that have cut off lines of credit. Further, there is a debt of $10bn owed to the World Bank and 2.2-million citizens face hunger, according to the World Food Programme.

A radical push by Zanu (PF) to indigenise 14 sectors of the economy in the next five years has unsettled foreign investors, nervous about being forced to surrender a 51% controlling stake to black Zimbabweans in their enterprises.

In his inauguration speech last month, Mr Mugabe promised a 5% pay rise to public servants as he spoke of concern over their material position. They already gobble up about 70% of the government’s revenue in monthly salaries averaging $300, but are pressing for a minimum of $540 to match the poverty datum line.

The appointment of Patrick Chinamasa, a key political lieutenant greatly loyal to Mr Mugabe, as the new finance minister has received little praise from economic observers, who are sceptical about his credentials.

Tony Hawkins, an economics lecturer at the University of Zimbabwe, said the new finance minister was in a tough position. “Mr Chinamasa is picking up a tough job, although in his favour is that he is a senior minister who has lots of experience.

“However, being in charge of the Treasury needs a strong-minded person who can resist the many demands thrown at him. Promises were already made before a new cabinet was sworn in and those were without the calculation of cost, so he already is in a tough position .”

Vincent Musewe, an independent economist based in Harare, was dismissive of the choice of Mr Chinamasa and the calibre of the cabinet, which he said was unchanged. “Will he (Mr Chinamasa) insist on accountability of diamond revenue?

“The trouble is there are no independent thinkers in the cabinet, so concern will not be about service delivery but about loyalty to Mr Mugabe. The country will suffer and we are unlikely to attract the money we need .”

Mr Chinamasa replaces Tendai Biti, the secretary-general of the Movement for Democratic Change (MDC-T), who was the political head of the Treasury during the unity government. Mr Biti was widely seen as a stumbling block in supporting Zanu (PF)’s economic policies that included funding new black farmers and the 51% indigenisation programme.

The outspoken Mr Biti pursued a belt-tightening programme, resisted pressure to hike civil servants’ salaries and called for accountability in the revenue coming from the Marange diamond fields.

Before Mr Biti’s appointment, Mr Chinamasa had served as the acting finance minister from 2008 -09 and is largely credited with the introduction of the US dollar and the rand in Zimbabwe after the Zimbabwe dollar imploded.

Reserve Bank of Zimbabwe governor Gideon Gono on Wednesday gave the thumbs up to Mr Chinamasa’s appointment. “Mr Chinamasa is not new to the portfolio and we are confident that he is more than equal to the task,” he said.

Mr Hawkins indicated that the business sector was likely to welcome the replacement of Saviour Kasukuwere with Francis Nhema as the new indigenisation minister. Mr Kasukuwere crossed swords with foreign-owned companies as he pushed for compliance with the 51% indigenisation requirement.

His replacement by a moderate Mr Nhema could somewhat allay investor fears and cool down the election rhetoric that saw a lot of foreign companies withholding fresh investments.

Bulawayo business mogul Obert Mpofu, who presided over the mines portfolio that oversaw the lucrative $2bn Marange diamond fields was replaced by Walter Chidakwa. Mr Chidakwa is seen as a good replacement as he has accumulated much of the relevant experience, having been at the Zimbabwe Investment Authority.

But whether Mr Chidakwa will have the backbone to reduce the corruption generally associated with the diamond industry remains to be seen. Investors will also be waiting to see how, together with Mr Nhema, he will navigate the issue of ownership and indigenisation of foreign mining companies operating in Zimbabwe. The country has significant amounts of natural resources. It is second only to S A in terms of platinum reserves and also has significant gold, diamond, coal, chrome and uranium reserves.

During the ’80s, before the end of apartheid in South Africa, Zimbabwe was the bread basket of the region. At its peak, Zimbabwe was the number one exporter of tobacco in the world and was also strong in the production of cotton, maize and beef.

But US trade sanctions, coupled with a chaotic land redistribution programme, have since turned agriculture from a net exporter into a net importer. It remains the backbone of the Zimbabwean economy, though.

Joseph Made, who has been at the helm of the agriculture ministry from time immemorial, has retained his position as the political head of the portfolio.

Mr Made, like Mr Moyo, lost his seat in parliament but was among the five Mr Mugabe is allowed to appoint under the new constitution. It is difficult to determine what he saw in Mr Made, apart from party loyalty.

The only significant change in the agriculture ministry is the appointment of two deputy ministers, one responsible for crops and the other for livestock and agriculture mechanisation.

Greatly worrying too is the collapse of the state enterprises ministry. It remains to be seen how the government intends to deal with once viable and now ailing state enterprises such as Air Zimbabwe, National Railways of Zimbabwe and the Zimbabwe United Passenger Company. Presumably they will all be shifted to the ministry of transport. But privatisation seems to be miles away for now. Business Day