Can Mthuli Ncube save Zimbabwe?
By John Sparks | Sky News |
When I met Mthuli Ncube at the swearing in ceremony for Zimbabwe’s new cabinet in September, I wondered whether this softly spoken academic was taking on more than he could handle.
“Have you got the political backing to make the sort of tough economic decisions you are going to have to make?” I asked gingerly. “Oh yes, oh yes, yes I do,” came the reply from the man who is the country’s new Minister of Finance.
However, a man who used to teach MBA students in the UK how to spot business opportunities is now tasked with resuscitating a national economy that is so dysfunctional and inherently rotten that whole thing is about to collapse around him.
Just two months after an election that was supposed to usher in a new era of growth and stability, Zimbabwe’s economy is imploding.
The price of basic commodities has exploded and items like fuel and bread are getting difficult to find. Government debt is ballooning and hard-currency like the US dollar is impossible to source. The country’s ad-hoc domestic currencies (the ‘bond’ note, bank cards and electronic ‘eco-cash’) are plummeting in value, resulting in the closure of dozens of shops in Harare and Bulawayo.
As one businessman in Zimbabwe told me, there is no point selling goods in local currency anymore because the money they receive at the till drops in value so quickly, they are unable to use it to restock their shelves.
The situation has become so serious that my anonymous contact compares it with the crazed hyperinflation of a decade ago (when you needed a plastic-bag of 100-trillion Zimbabwean dollar banknotes to buy a few basic groceries).
“When (the then-leader) Robert Mugabe was trying to deal with the whole hyperinflation melt-down, he sent the police out to arrest people who closed down their businesses. They were charged with various forms of ‘economic sabotage’.
“To avoid the same fate, private-sector people are now closing up their businesses for ‘stock taking’ or because of non-specified ‘computer glitches’. On social media there are lots of jokes around the whole ‘Zimbabwe: closed for stock-take’ theme.”
If you wanted further evidence of just how serious the whole thing is, the people from KFC chicken have just decided to close down their restaurants, “due to the current pressure on the country’s economy. The currency challenges have affected our operations and supply…”
Finance Minister Ncube is mounting a fight-back, introducing a new ‘stabilisation programme’ that will cut government spending – no easy thing in a country with a bloated civil service and a money-hungry military.
He also says Zimbabwe will start repaying foreign debts that it has been defaulting on since 1999 – to which financial analysts have retorted, “with what?”
What Ncube and his boss, President Emmerson Mnangagwa really need is a big cheque from international community to tide them over for a year or two but they are unlikely to get it because Mnangagwa’s party – the long-ruling ZANU-PF – won the recent election in the same dubious way they have been winning polls since the country’s foundation in 1980.
You can see how ZANU-PF rigs the vote in rural areas in two special reports broadcast by Sky News last month.
:: A new leader but no change in Zimbabwe
:: Dealing with the legacy of one party rule
Mthuli Ncube is supposed to represent a breath of fresh air in Zimbabwe. A technocrat and a university man, he has spent his career teaching ‘tomorrow’s leaders’.
