CRISIS REPORTS

Issue 10 ■ July 2007 Fresh insights into the Zimbabwean situation

END OF ROAD FOR CENTRAL BANKER?

Gono likely to either resign or face the sack after his withering criticism of the president’s price-slashing move.

By Norman Chitapi in

Reserve Bank governor Gideon Gono may not be in his post for much longer after apparently falling out with his patron, President .

In a withering attack on the government’s June 26 decision to slash prices of basic goods by 50 per cent, Gono publicly warned last week of a boomerang effect,

with companies shutting down because Lazele Credit: of losses. He painted a grim future of A trader sells sugar in one of Harare's high-density surbubs. Most of the products empty shops “leading us to needlessly that have disappeared from supermarket shelves have found their way onto the black draw spears against each other” as market. Picture taken July 10, 2007. people run out of basic necessities. official from the pressure group Crisis economic recovery in the near future, Mugabe has so far not commented on Coalition of Zimbabwe in Harare this which is very unlikely, would for them the statement by Gono, who is also the week. The official spoke in his be only a bonus.” president’s personal banker. However, personal capacity and refused to be it is the first direct attack by a senior named, lest his stance be confused When Gono took over in December government official on Mugabe’s with that of the coalition. 2003 as governor of the Reserve Bank policies. And analysts say Gono’s of Zimbabwe, he famously declared remarks mean he is unlikely to remain “Gono’s options are very limited “failure is not an option” when in government much longer. indeed,” said the official. “He can questioned about his capacity to either resign or stay on and be fired. resolve the country’s seemingly “We are seeing the beginning of the Mugabe and his colleagues are intractable problems. Last week, he all end for Gono’s roadshow,” said an concerned with political survival. An but accused Mugabe’s government of

NEWS IN BRIEF

■ Government-imposed price 4,500 per cent, but financial ■ Women’s rights activists are controls which have emptied institutions estimate it is double that suffering increasing repression and supermarket shelves and petrol figure. torture, according to Amnesty stations will continue because they International. Members of Women of are bringing relief from “inexplicable ■ ’s Democratic Zimbabwe Arise, a group which is in and astronomical” price increases, Alliance claims that between 5,000 the forefront of human rights President Robert Mugabe said this and 6,000 Zimbabweans are entering protests, have been arrested with week at the opening of parliament. the country legally every day, and it their babies, beaten and tortured. He told lawmakers that western suspects that at least another 1,000 sanctions, sabotage conducted by are coming in illegally. A delegation ■ President Mugabe announced Zimbabwe’s “political enemies”, and from the ruling African National this week that courses in corruption drought were jointly to blame for Congress found that 5,000 and the danger it poses to the the country’s economic crisis. Year- Zimbabweans were arrested in July economy will form part of the on-year inflation is officially put at while trying to enter South Africa. curriculum in Zimbabwe schools.

JULY 2007 ■ 1 THE INSTITUTE FOR WAR AND PEACE REPORTING stabbing him in the back when it If Mugabe fires Gono, he faces a sanctioned land invasions, which he launched a blitz on businesses for backlash from his colleagues in the said disrupted the nation’s economic alleged “profiteering”. Southern African Development backbone, the commercial agricultural Community — however, that is unlikely sector. It was a criticism he had been The Crisis Coalition official said Gono to stop him, continued the official. making publicly since 2005, five years felt gravely betrayed by the government after the land invasions began, and after he came in “as the knight in “In terms of national policy, they are when most of the land had been shining armour” to get the country out of worlds apart. The time has almost parcelled out, either to government an eight-year downward spiral. come for them to part ways if Gono officials or to landless “war veterans”. wants to save some modicum of When Mugabe appointed Gono as credibility as a professional,” he said. Gono also attacked government Reserve Bank governor in 2003, he also “In political terms, he will have to look spending, the huge budget deficit and attacked Gomo’s precedessor, Leonard for sanctuary in one of the factions — corruption, all of which frustrated the Tsumba, for following textbook either in the divided opposition or those battle against inflation. He has long economics by refusing to print money as in ZANU-PF who believe in the efficacy favoured a free exchange rate for the and when it was needed. Mugabe said of his policy recommendations.” local currency, which is pegged at 250 he wanted somebody who understood Zimbabwe dollars, ZWD, to one US the country’s unique situation in the face ZANU-PF is divided into three major dollar. This is against the more realistic of western sanctions which he claimed factions. One supports Mugabe’s sole black market rate of more than were being orchestrated by the former candidature in the presidential election 100,000 ZWD to one US dollar. Gono colonial power, Britain. next year; the other two are fighting each said government’s unrealistic rate had other to replace the party’s 83-year-old caused “pricing distortions and Gono had so far been complying with leader. Gono is said to be aligned with instability” in the market. Mugabe’s brand of economics, but the the faction led by Politburo member and latest crisis has seen battle lines Rural Housing Minister Emmerson Over the past three weeks, police drawn between himself and his patron. Mnangagwa, against that led by retired have arrested some 1,700 company The central banker said attacks on army commander General Solomon representatives for failure to comply businesses and blanket price controls Mujuru, the husband of Vice-President with its decree on prices. Shops have imposed by government on June 26 Joice Mujuru. Both Mnangagwa and been looted while most fuel service and enforced by state security Mujuru accuse Mugabe of ruining their stations are dry. agencies were “ruinous”. business interests. Opposition leaders and captains of “It is critical that urgent steps be taken to The ZANU-PF politician said Gono had industry have accused Mugabe of deal with the supply side imperatives wanted to build his future political adopting populist policies to win over without which, or failure of which, will career on the back of a successful voters ahead of next year’s first joint leave the country in a worse-off economic revival programme. presidential and parliamentary elections. situation,” said Gono in a letter The MDC has threatened to boycott the addressed to Mugabe, which was “Reducing inflation to a single digit as ballot if there are insufficient electoral law leaked to the press. He accused he had set out to do at the beginning reforms to ensure free and fair voting. government of not having a plan of how would have been a good entry point to maintain production at the prices it [into politics],” he said. “This would The leader of the main faction of the was forcing businessmen to maintain. have put him ahead of competition in MDC, , called the “We need to define clearly at what point ZANU-PF and in the [opposition] price cuts an “election gimmick” to we will exit from the current blitz,” he Movement for Democratic Change as buy votes — but Mugabe sees the said. well. Now he realises that his political recent daily price increases as ambitions are being ruined before he business’s attempt to engage in the A senior ZANU-PF official opposed to has made them public.” politics of regime change. Mugabe’s latest assault on business said Gono and Mugabe had never Gono’s litany of complaints about the Mugabe has in the past accused before been so sharply divided. “Gono government, which were leaked to the business of sponsoring the MDC. Now, has been Mugabe’s personal banker public, could be an attempt to regain analysts say, he has found an and financial advisor for many years some credibility ahead of ZANU-PF’s opportunity to hit them where it hurts — since he was chief executive officer special congress in December. most — the pocket. But, the analysts at the Commercial Bank of say, Mugabe might have shot himself Zimbabwe,” said the official, who In his letter to Mugabe, Gono said in the foot, for the resulting shortages asked to remain anonymous. “He is there was need to respect private will hurt him and his party in the perhaps the only person who knows property and for policy consistency to elections next year. and fully understands the nature of attract foreign investment, which would Mugabe’s finances, but now they are generate much needed foreign Norman Chitapi is the pseudonym of sharply divided on national policy.” currency. He attacked state- an IWPR journalist in Zimbabwe. ■

2 ■ ISSUE 10 ZIMBABWE CRISIS REPORTS POST-MUGABE QUANDARY

There’s little consensus amongst analysts over who should lead the country once Mugabe finally goes.

By Benedict Unendoro in Harare

As the Zimbabwean crisis deepens, analysts are already exploring which political party would be best equipped to turn around the country’s fortunes in the post-Mugabe era.

Many observers, including the outgoing ambassador to Zimbabwe, Christopher Dell, have predicted the demise of President

Robert Mugabe’s regime in six months. Lazele Credit: Mugabe has no choice but to step down President Mugabe inspects a guard of honour at the opening of parliament. by September this year, for the good of Picture taken July 24, 2007. himself, the country and his ruling party, said ZANU-PF insider Ibbo Mandaza. Britain, the former colonial power, “Over the past 27 years, ZANU-PF has would prefer a reformed ZANU-PF as developed a distinct socio-politico- The Zimbabwean crisis has deepened the way forward. economic culture and value system in the last two weeks since Mugabe rooted in political illegitimacy, poor ordered a price slash on all goods and But Arthur Mutambara, leader of one of country governance, economic services, a populist move many see as the factions of the opposition Movement mismanagement, bad policies, the tipping point for his own fortunes. for Democratic Change, MDC, said this corruption, patronage, incompetence, To wriggle out of the resulting chaos, option was unlikely to work. and disrespect for the rule of law. Mugabe has no choice but to introduce subsidies, which economists “The international community, “Whilst Mugabe is the personification and the International Monetary Fund, particularly western governments, have and cardinal symbol of this misrule, IMF, say will increase quasi-fiscal shown a keen interest in the jockeying these traits are now deeply rooted deficits that will in turn stoke hyper- for positions among ZANU-PF factions, within ZANU-PF, which is rotten to the inflation further. The IMF says the which seems to imply that if any one of core. Mugabe is the glue that keeps government will have no choice but to the factions were to successfully the rot together.” resort to printing more money in order replace Mugabe they would consider to finance the subsidies. This, normalising relations with Zimbabwe,” Prominent Zimbabwean economist economists say, will trigger the further he wrote in an opinion piece for a Tony Hawkins supported Mutambara’s decline and the fall of the government. Zimbabwean news site. views in a recent interview with the independent Zimbabwe radio station Zimbabwe faces a combined “The thinking seems to be that the SW Radio, “I also don’t believe the presidential and parliamentary election problem is Robert Mugabe the person, people of Zimbabwe are willing to be early next year which many are and that anyone else will do just fine.” governed by a reformed ZANU-PF pinning their hopes on to bring about because I think ZANU-PF has gone much-needed change to the country. In his piece, Mutambara argues that way beyond the point of no return in However, commentators say the poll ZANU-PF as a political construct is respect of re-branding and so on. may not in itself be the solution, even if beyond redemption and should not it is held in a free and fair atmosphere. have a future in the new Zimbabwe, “When you have done as much harm “First and foremost, the Zimbabwean as they have done it is very hard to It is thought that South African crisis is bigger than the person of believe that voters — if they are given president , who is Robert Mugabe. There are institutional, a free and fair opportunity — would currently trying to mediate in the structural and systemic dimensions to vote for a continuation of this party Zimbabwean political crisis, and the challenges we are facing. regardless of whom is leading it.”

JULY 2007 ■ 3 THE INSTITUTE FOR WAR AND PEACE REPORTING

At the same time, however, political to power on a protest vote but once “The period immediately after observers do not see a weakened MDC in charge became guilty of the same Mugabe’s fall should see the as a viable alternative to ZANU-PF. misdemeanors that Kenneth demilitarisation of state institutions and Kaunda’s United National no one can do this except ZANU-PF The MDC split in October 2005 over Independence Party, UNIP, was itself, or its offshoot, because these an issue that many saw as trivial — the ousted for. military figures have no respect for the newly introduced upper house of opposition,” said the DP politician. parliament, the senate. He pointed out that Frederick Chiluba’s party was in fact seen as more corrupt But a reformed ZANU-PF option faces The main faction of the party, led by than its predecessor; and Chiluba a major challenge in the person of founding president Morgan Tsvangirai, himself is currently on trial for Mugabe himself — especially if he did not see the value of contesting siphoning 500 million US dollars from decides to hang on until elections next elections for the senate, arguing that state coffers. year. the results were a fait accompli because the playing field was so Analysts also cite the Kenyan model “Mugabe is not a Nyerere,” said the heavily tilted in favour of ZANU-PF. But where the Rainbow Alliance, a journalist, referring to the late founder the other MDC faction participated in grouping of opposition politicians and of the Tanzanian nation, Julius the ballot — though won an ruling Kenya African National Union Nyerere, who, on seeing the disastrous insignificant number of seats. The rebels, swept to power under Mwai course his socialist policies were latter group alleges that Tsvangirai Kibaki. They note that corruption and steering the country, stepped down triggered the MDC split with his repression remain as all-pervasive as from the presidency and played mid- “dictatorial tendencies” and his under . wife to the reform of his own party, followers’ propensity for violence. Chama Cha Mapinduzi, CCM. In 1985, The journalist also said signs of Nyerere relinquished the national corruption were already showing in the presidency but retained the MDC as some of the party’s most chairmanship of the party to oversee senior members were benefiting from its transformation. “Mugabe is the glue that Mugabe’s largesse. Recently, several keeps the rot together” senior party officials took delivery of — MDC’s Mutambara. farming equipment including tractors from Mugabe’s farm mechanisation Political observers do not programme. believe the MDC is a viable alternative to ZANU-PF. Many also see the chance of either An opposition politician in the fringe MDC faction winning the elections next Democratic Party, DP, said, “Even if year as remote. the MDC somehow won the combined presidential and parliamentary polls, Ever since Tanzania, one of the most “The MDC surprised everyone in the the transition would be far from stable nations in sub-Saharan Africa, 2000 general election when they smooth. Mugabe has militarised all has been ruled by successive CCM almost upset ZANU-PF. But people state institutions and generals have governments and its democratic should remember that that was mainly been quoted as saying they would system is seen by many as a model to a protest vote. Ever since that shocker, not allow Tsvangirai to rule emulate. the MDC’s fortunes have been Zimbabwe.” dwindling, as has been shown by the “Unfortunately, Mugabe lacks loss of several seats in subsequent Indeed, in many areas of the public Nyerere’s integrity and wisdom. polls. Now a divided MDC cannot be sector, including the judiciary and Mugabe, unlike Nyerere, won’t admit expected to fare any better,” said an state-run companies, military men now his mistakes, and won’t show flexibility independent journalist working in hold key positions. On the eve of the and pragmatism. Instead, he would Harare. 2002 presidential election, senior like to drag his country into the mud officers released a statement saying with him,” said the journalist. Even if the MDC won the election, that the army would not support a buoyed by the support of a president who lacked liberation war But Simba Makoni, tipped by many disgruntled populace struggling under credentials — a clear reference to observers as the one likely to lead a a collapsed economy, this would not Tsvangirai. reformed ZANU-PF, said during a signal the beginning of a new era, he recent visit to South Africa that much said. Defence forces chief, General was taking place inside ZANU-PF and Constantine Chiwenga, reiterated this a reformed party would soon emerge. He cited the Zambian experience partisan stance in a speech made just where the opposition Movement for before the March 2005 legislative Benedict Unendoro is the pseudonym Multiparty Democracy, MMD, swept polls. of an IWPR journalist in Zimbabwe. ■

4 ■ ISSUE 10 ZIMBABWE CRISIS REPORTS BUSINESSES REELING FROM PRICE- SLASHING ORDER

Panic and desperation sets in among Zimbabweans as most retail outlets run out of goods.

By Nonthando Bhebhe in Harare

“It was an act of madness,” said a manager at a Spar store in the low- income Harare suburb of Seke. “[The] ripple effects will be felt for a long time in Zimbabwean business. Job losses will be immediate.”

Businesses in Zimbabwe are still reeling from President Robert Credit: Lazele Credit: Mugabe’s June 26 decision to slash Motorists queue for fuel, some with extra containers, as they rush to buy increasingly the prices of all commodities by 50 scarce fuel supplies in Harare. Picture taken July 21, 2007. per cent, in a bid to tackle skyrocketing inflation, which he claimed is being fuelled by the private destroying the formal sector. So where from which dealers obtained the sector to bring down his government. do we go from here?” said Chari. foreign exchange to import. The move sparked a stampede of shoppers, leaving companies with Like Operation Murambatsvina, the But since the price-slash directive, empty shelves. Many say they may current operation, according to those service stations have run dry now be forced to close. Mugabe, is to stop the formal sector and have not restocked. The from working with western powers government has ordered all service “This act is the latest in a long chain of wishing to effect “regime change” in stations to sell their fuel at 60,000 irrational political decisions Mugabe Zimbabwe. ZWD a litre but NocZim supplies are has taken in the past few years to still very low. The national fuel keep himself in power,” continued the Several senior company executives, procurement company has promised Spar manager. “The next will most many from companies headquartered to increase its deliveries to service probably be the seizure of mines and outside Zimbabwe, have been stations countrywide. foreign-owned businesses which he is arrested and have spent nights in filthy legitimising through the Economic police cells for failing to comply with The public transport sector is almost Empowerment and Indigenisation Bill the government directive to reduce grinding to a halt after government currently before parliament.” their prices. ordered them to reduce their fares or face the cancellation of their operating Tichafa Chari, a schoolteacher in the Long fuel queues are back at the few licences. same area, compared the latest move service stations that have received to Operation Murambatsvina, the cheap fuel from the state-owned Government told public transport military-style demolition of urban National Oil Company of Zimbabwe, operatives at a meeting last week that dwellings in 2005 which destroyed the NocZim, which they are selling at if one of their vehicles was caught informal sector and left 700,000 60,000 Zimbabwe dollars, ZWD, a litre, over-pricing, officials would cancel the people homeless and two million with (just under 50 US cents at black licences of not just that one vehicle no source of income. It was believed market prices), down from nearly but of the whole fleet. at the time that Mugabe did this to 200,000 ZWD two weeks ago. stem fears of a rebellion by the urban One city commuter bus operator said, poor that would unseat him. The fuel situation had stabilised after “Really I cannot be working for the government allowed private government. It makes no sense to “Operation Murambatsvina destroyed companies to import and sell fuel at continue when I will be making such a the informal sector, and now this is rates determined by the black market huge loss.”

JULY 2007 ■ 5 THE INSTITUTE FOR WAR AND PEACE REPORTING

Motorists have also been affected as selling anything at the moment. Our be delivered. Its general manager in they cannot get fuel and are being suppliers are no longer supplying us. Harare’s Workington industrial area forced to either source from the black was recently arrested together with 33 market or leave their cars parked. “I don’t want to think about the worst top executives of other companies for Traffic on Harare’s roads has been — I am trying to be optimistic but at allegedly ignoring the government significantly been reduced over the the same time I need to be realistic. It directive to reduce prices. last week or so. will just kill me if I lose this job. How will I feed my kids? Already I am struggling and am only able to provide “First it was the bread “It makes no sense to one meal a day. The government needs to think about people like us queues, now it’s for continue when I will be and put in measures to protect us.” everything — this is making such a huge loss” absolute madness” — bus company operator. In response to the beef shortages, the — shopper. government last week revoked the licences of all private abattoirs for refusing to continue supplying meat Zimbabweans initial excitement and meat products. They had stopped Long queues could be observed at TM about the order to slash prices of slaughtering livestock in protest Supermarket in Arcadia suburb, where basic commodities by half has now against the slashing of prices which the prices of basic commodities like been replaced by panic and they say would bankrupt them. washing soap, washing powder, desperation as most retail outlets Vaseline petroleum jelly and margarine have begun to run out of goods. The Trade Minister Obert Mpofu said the were reduced by more than 100 per first casualties of the price slash Cold Storage Company, CSC, part cent. Reports say the situation is the were the butchers, which ran out of owned by the government, would now same countrywide. the beef and pork within a few days have the sole responsibility of of the directive. Most meat outlets in slaughtering livestock. The CSC, Thomas Madziva, who was queuing to Harare suburbs have either closed however, was already facing serious buy slices of polony and bread rolls for or are about to. financial problems and had been his breakfast, was irate. operating well below its capacity. Highfield butcher Petros Mawoneke “Why should I queue when all I want is was on the verge of tears when IWPR One of the largest outlets of pork polony? This is getting really asked him what effect the price products, Colcom Foods, has already frustrating now. First it was the bread reduction had had on him and his run out of everything except bacon, a queues, now it’s for everything — this family. few boxes of pork sausages, polony is absolute madness. Our relief was and smoked ham, all of which are temporary — we should have known “I just don’t know for how long I will be foods for the rich. this is where Mugabe’s generosity coming to work if the situation would land us.” continues like this. I am afraid that one An employee at Colcom Foods told day, we will be told not to report for IWPR that the company did not know Nonthando Bhebhe is the pseudonym work any more because we are not when the next supplies were going to of an IWPR journalist in Zimbabwe. ■

The Zimbabwe Crisis Report is components — information promotes dialogue and builds an initiative of IWPR-Africa’s provision, capacity building and bridges within the region. It also Zimbabwe Programme. dissemination and distribution. raises the Africa wide and This programme promotes The key purpose is to increase international profile of democratization and good awareness in the Southern African Zimbabwe in the context of the governance with Southern Africa region of the Zimbabwean region. Importantly it also builds and contributes to the situation and the implications for the skills and capacity of the development of a culture of regional peace, security and media to reliably and accurately human rights and the rule of law. economic development. report political transition, Focusing on Zimbabwe the It also contributes to the governance and human rights programme has three core development of regional policy, issues.

The programme is managed by the Institute for War and Peace Reporting — Africa. For further details go to www.iwpr.net

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