By Rawlings Magede
I have always expressed misgivings towards President’s Emmerson Mnangagwa’s neo-liberalism route since he ascended to power in 2017.So determined has been the president that even when he took power, he deployed an offensive public relations team to sanitize him and project him as a reformist .For a moment, western countries particularly the UK warmed up to his call especially on the need for reform and mend broken bridges left by his predecessor, Robert Mugabe.
When President Mnangagwa took oath of office his message was punctuated with hope and optimism. His message “Zimbabwe is open for business” soon became his clarion call whenever he was interviewed by international media. So charmed were the Breton Woods institutions that in April 2019, a team from the International Monetary Fund (IMF) announced of an agreement that it had reached with the Zimbabwean government on macroeconomic policies and structural reforms that underpinned a Staff Monitored program (SMP).This monitoring programme would see the government and the IMF agreeing on policies to address the macroeconomic imbalances and tackle policy inconsistencies within government. This was then followed by removal of subsidies on fuel and other import subsidies. Even when citizens took to the citizens in January 2019 to register displeasure at the increase in the price of fuel, the president never took heed.
All these set of policies had devastating effects on the ordinary citizen but yet Finance Minister Mthuli Ncube continued with his gospel of austerity for prosperity. Mthuli even announced that there was need to cut government wage bill by laying off about 3000 government workers and announced that the government had set aside an initial $53m to compensate white farmers. The austerity for prosperity (neo-liberalism) claimed its own victims. Low income households had to bear to cost of austerity through expenditure cuts on social protection which are initially meant for vulnerable groups and beneficiaries of programmes such as the Basic Education Assistance Programme (BEAM). All this goes against the grain of our constitution that states that government is supposed to provide adequate social services for its citizens. Social protection for vulnerable groups has remained on paper. Rather government has aptly demonstrated that its priorities are misplaced. Ministries such as Defence, Home Affairs are given top priority ahead of even the Ministry of Social Welfare.
ED’s uninspiring dance with IMF
The IMF recently announced that the SMP program was “off track”. “Uneven implementation of reforms, notably delays and mis-steps in FX and monetary reforms, have failed to restore confidence in the new currency,” the IMF said in a statement. The implementation of the SMP was beset by problems even before it even kicked off. While the government was keen to remove subsidies, over tax its citizens and partially privatize state institutions, it failed to demonstrate the willingness to arrest government’s insatiable appetite to spend. Throughout the SMP, spending especially by the Office of the President and Cabinet remained secretive. Added to this, in September last year, the IMF even warned government that the state payouts to a partner of Trafigura group LTD undermined the country’s newly introduced currency. Payments to Sakunda Holdings in July 2019 owned by President Mnangagwa, Kuda Tagwirei under the command agriculture scheme were again secretive with most economist arguing that the payment made by the central bank were made after printing of more money. Such a disbursement led to an 80% surge in the amount of money in circulation compared with an IMF set target of between 8-10%.Such inconsistencies means that even as the SMP has already concluded in January, plans by Zimbabwe to get debt relief and borrowing power hangs in balance.
The president has also demonstrated indecision with regards to neoliberalism. During the day, he projects his government as socialistic but during the night the capitalistic tentacles of the mafia and cartels linked to his government continue to hold him back. While his administration has somewhat demonstrated willingness to commit to neoliberalism, the issue of monopolies continues to dog the swift implementation of neoliberalism. It would seem that those in government are creating for themselves loopholes for self enrichment. Examples of such manoeuvres include the introduction of garrison shops and the monopoly enjoyed by the Grain Millers Association of Zimbabwe led by one Tafadzwa Musarara.There is no doubt that President Mnangagwa has failed to deal with corruption especially if it involves his cronies.Recently, Mnangagwa was sucked into a US$9 million saga for the rehabilitation of the Grain Marketing Board (GMB) silos fronted by millers. While the revelation made when Musarara appeared before the Wadyadyena led Parliamentary Portfolio Committee on Agriculture made good headlines, there is no action whatsoever that will be taken. Very soon the nation will forget and move on to other social issues that have for long acted as distractions for citizens.
In the final analysis, expecting fiscal reforms from a government that has an uncontrollable spending habit is rather ambitious. The austerity for prosperity gospel has been preached much to the suffering masses while those in government have been exempted. The command element within his government makes it difficult for ED to go full throttle on his neo-liberal agenda.
Rawlings Magede is a Development Practitioner who writes here in his personal capacity. Feedback on vamagede@gmail.com
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