The Morning After….

Shari Eppel, Director, Solidarity Peace Trust

Harare - morning after (stevenchikosi.com)

Harare – the morning after (stevenchikosi.com)

As I gaze into the tea leaves at the bottom of my first post-Mugabe cup of tea, I try to divine the future of our nation, Zimbabwe. Last night was sheer euphoria here on the streets of Bulawayo, and of course throughout the nation, as spontaneous crowds gathered to dance and cheer the dictator on his way.  His resignation that we had all been expecting hourly for the previous week, had finally come late in the afternoon of 21 November, after impeachment proceedings had already begun in Parliament. Now, it is a bitter-sweet ‘morning after’, sipping the dregs of my Five Roses tea.  It has always been not just about Mugabe going, but what happens once he is gone. And what a crazy fortnight it has been, not just for Zimbabwe, but in terms of recent African history. (Read more…)

Wed, November 22 2017 » History » Leave a comment

Zimbabwe – Caught between the Croc and Gucci City

Brian Raftopoulos, Director of Research and Advocacy, Solidarity Peace Trust.

The last two weeks have witnessed tumultuous events in Zimbabwean politics. After months of factional struggles between the Lacoste faction led by then Vice President Emerson Mnangagwa, also nicknamed the crocodile, and the Generation 40 (G40) faction around President Robert Mugabe and his wife Grace, also known as Gucci Grace, Mugabe fired Mnangagwa on the 6th November. This followed Mugabe’s warning to Mnangagwa two days before when Grace Mugabe was booed at a rally in Bulawayo. The President’s wife threatened the embattled Vice President with the call that the ‘snake must be hit on the head.’ This was the First Lady’s decisive move in her bid for the Vice Presidency in the upcoming Zanu PF congress in December 2017. (Read more…)

Tue, November 21 2017 » Zimbabwe Review » Leave a comment

Zimbabwe Bond Notes and Their Possible Long-term Legacy

Tinashe Nyamunda analyses the Reserve Bank of Zimbabwe’s efforts to address the liquidity shortage in the country.

Zimbabwe $2 Bond Note

Zimbabwe $2 Bond Note

Zimbabwe’s export incentive scheme was introduced to encourage exports and address the liquidity crunch in the country. If, for example, tobacco exporters accept bond notes, they receive a five percent incentive in addition to their export earnings. But in a country with a serious shortage and rationing of foreign exchange, accepting bond notes whose value against the US dollar is uncertain in the immediate-to-long term is not really a choice. Barely a month after the initial introduction of the infamous bond notes under the so-called “export incentive scheme,” the Reserve Bank of Zimbabwe (RBZ) has disbursed more bond notes currency into Zimbabwe’s financial system. On 28 November 2016, the RBZ introduced $10 million, followed by a further $7 million and $12 million barely a month later, bringing the full amount in circulation to $29 million. Fully aware of predictions that the introduction of bond notes would result in hyperinflation, the RBZ has resorted to disbursing the pseudo currency on a “drip feed” basis.  Contrary to earlier popular belief that bond notes would immediately trigger hyperinflation, their slow introduction has not even resolved the cash shortages. But does this translate to a proper management of currency emanating from fears of hyperinflation? What follows is my opinion on what bond notes have meant for the Zimbabwean economy in the first month of their introduction and their possible long term legacy. (Read more…)

Sun, January 1 2017 » Economy, Zimbabwe Update » Leave a comment

Climb down or pragmatism? : Recent developments in Zimbabwe’s indigenisation policy, 2009 to 2016

by Musiwaro Ndakaripa

(International Studies Group, University of the Free State, South Africa)

5 December 2016.

Introduction

Economic indigenisation has been a recurring theme in post-colonial Zimbabwe.[1] In the early 2000s the Zimbabwe African National Union – Patriotic Front (ZANU-PF) government tended to conflate indigenisation with the land question for electoral purposes. However, as the land question lost its lustre in the late 2000s indigenisation stood as a distinct subject shaping the political landscape in the country. A critical examination of recent developments on the indigenisation policy suggest that ZANU-PF piggybacked the Movement for Democratic Change (MDC) parties during the power sharing government (PG) era by enforcing the Indigenisation and Economic Empowerment Act of 2007[2] despite its negative effects on foreign investment and the economy in general. ZANU-PF’s game plan was to gain popularity through the policy but share the blame with other political parties in the government if the economy was to nosedive. Once ZANU-PF retained power and faced the unenviable task of sustaining and growing the economy the party climbed down on indigenisation. This is apparent in public pronouncements by senior government officials and the lukewarm implementation of the policy. (Read more…)

Mon, December 5 2016 » Economy, Zimbabwe Review » Leave a comment

Un(Bond)ing Zimbabwe’s financial confidence: bond notes, people and politics

Tinashe Nyamunda looks at Zimbabwe’s ‘liquidity crunch’

A political storm is brewing in Zimbabwe over the introduction of some US$75 million worth of bond notes, initially scheduled for the end of October but which the Reserve Bank of Zimbabwe (RBZ) has delayed to November – or even December (as it is unsure of public response).

This is sparking protests from different political movements in Zimbabwe – such as the Evan Mawarire-led #thisflag and Prosper Mkwananzi’s #tajamuka – and government faces legal challenges from former Vice-President and leader of the newly-formed Zimbabwe People First (ZPF) Joice Mujuru, prominent Harare businessmen Fredrick Mutanda, and lawyer Fadzai Mahere. Many see the notes as unbacked bond paper with currency denominations printed on them. They believe their value will rapidly collapse.

This is despite the US$200 million dollar facility that the RBZ claims to have accessed from the African Export Import (Afrexim) Bank to back the new bond notes and hold their value.

But, as economist John Robertson has argued, ‘money is all about trust’. The people of Zimbabwe do not trust the bond notes because of the horrors of Zimbabwe’s recent hyperinflation past. For that reason, their introduction is seen as the act of a desperate and predatory government seeking to return to worthless Zimbabwe dollars. Many believe that this will only result in ordinary people suffering, while providing new avenues of accumulation for the political elite. (Read more…)

Wed, November 23 2016 » Economy, Zimbabwe Review » Leave a comment