The challenges to reform in post-coup Zimbabwe

November 27, 2017

Global Risk Insights

Robert Mugabe’s grip on Zimbabwe has finally been released after 37 years, following last Wednesday’s takeover by the military. But the country’s problems are far from over.

Mugabe’s undoing came after he expelled his right-hand man, Vice President Emmerson Mnangagwa, from the ruling Zimbabwe African National Union-Patriotic Front (ZANU-PF) Party. Mnangagwa had been locked in a succession struggle with Mugabe’s wife, Grace Mugabe, and the sacking triggered the military’s intervention.

A volatile situation

Incidents of violence have been minimal as the army urged the people of Zimbabwe to ‘limit unnecessary movement’ and called for calm. The military’s broadcast to the nation stated that they were not intending to take over the government. They are instead, allegedly pacifying a degenerating economic, political and social situation in Zimbabwe to prevent violence and unrest erupting from these dire conditions.

Both the Southern African Development Community (SADC) and the African Union (AU) are on record saying they will not support any government that comes to power via a coup d’état. This likely underlies the military’s determination to avoid that term.

Mugabe’s resignation is thus a positive sign. A prolonged standoff would have put trade and future economic growth in jeopardy; Zimbabweans were already starting to take their money out of the country.

Mnangagwa as interim President

Following the ousting of Mugabe, the Zimbabwe political landscape is unlikely to see many new faces, as the up-and-coming elements in ZANU-PF are being sidelined. Grace Mugabe’s G40 group of supporters have been branded as criminals by the military and some have been arrested. In any case, they appeared to be more interested in gaining access to resources and lucrative contracts than in transforming the nation.  

Grace Mugabe is highly unlikely now to succeed her husband as she is not liked by the military and her support base within ZANU-PF has been weakened.

The main opposition leader, Tsvangirai, has health problems which may see him unable to lead his MDC alliance in the planned 2018 elections. Should he again be offered his previous role of Prime Minister, he would be unlikely to enter the April elections.

The most probable successor to Mugabe, therefore, is Mnangagwa. A number of ZANU-PF factions have already u-turned on their opposition to him. Further, in the past he was touted as the best hope within the Party to create a pragmatic economic recovery based on re-engagement with international creditors and a reform package that had the ability to instil confidence in the Zimbabwean economy.

He is likely to be named interim President until the 2018 elections, perhaps at the head of a unity government. This would give him a certain legitimacy as well as probable support from the AU and SADC. However, given that the military was heavily involved in rigging previous elections and with Mnangagwa having strong links to them, the 2018 elections are highly unlikely to be free and fair.

Economic stagnation to continue

The opposition is disorganised and ZANU-PF has never played fair. The danger is that the coup will replace one autocrat with another, making the release of Mugabe’s iron grip on Zimbabwe of little benefit in terms of improving political and economic risks.

Under this scenario, the current stagnation of Zimbabwe’s economy is set to continue. Mnangagwa’s recovery plan, which involves re-engagement with international creditors and a reform package is unlikely to be explored, particularly before the 2018 elections.

Mnangagwa and his ZANU-PF allies have shown no intention of doing so thus far. Instead of tackling the huge challenge of implementing a national recovery plan for Zimbabwe, Mnangagwa is likely to focus his efforts on clawing back power within ZANU-PF, which is fraught with factionalism.

Moreover, entrenched authoritarianism, theft of public resources and large-scale mismanagementwill be extremely difficult to overturn in the short term. External factors such as depressed commodity prices and the appreciated US dollar further restrict Zimbabwe’s economic options.

Should the situation fail to improve, a worsening of skills shortages would be likely as an exodus of economic and political migrants turned to neighbouring countries, especially South Africa. There would be other regional ramifications too, with an impact on the currencies of Zimbabwe’s main trading partners, such as South Africa’s Rand.

A far-reaching reform policy, therefore, that includes systemic, political and structural change along with steadfast, determined and innovative leadership, is essential. Whether this happens through a more transparent and accountable and above all democratic political system, is open to question. In this regard, China’s growing influence could be an important factor, given that China is not known for concern with political reform in its investment destinations.

Zimbabwe could thrive – under the right conditions

The future of Zimbabwe under a continued ZANU-PF government looks bleak. However, Zimbabwe can thrive if governed properly, due to its vast wealth of natural resources.

The ideal scenario is one in which multilateral support from outside nations ensures that free and fair elections happen in 2018 to get the bankrupt, corrupt and increasingly predatory state back to economic profitability.

This would have flow on effects such as encouraging economic and political migrants to return to Zimbabwe as well as increasing Foreign Direct Investment. Although money is currently being drawn out of the country by investors, undermining Zimbabwe’s financial reserves, this is likely to be a short-term effect if free and fair elections are promised and above all occur.

If Zimbabwe comes under good governance, it won’t take long for its economy to rebound due to its abundant natural resources and providing corruption is also tackled robustly and fairly.

Contributor Biography

Global Risk Insights (GRI) is a world-leading publication for political risk news and analysis. Our aim is to bring the political risk industry into the 21st century by making it more innovative and accessible. Our global network of experts provides cutting-edge analysis on political events shaping business, economic, and investment climates in every corner of the world. We help businesses and individuals stay ahead of the competition by illuminating unseen risks and highlighting undiscovered opportunities.

We are at the forefront of innovation in our industry – we’ve pioneered a unique political forecasting methodology called Future Generator that combines big data analytics with human intelligence.

We have a growing network of more than 300 analysts who embody our 21st century ethos – they are entrepreneurial in spirit, global in perspective and local in expertise. Our team includes current and former presidential advisors, intelligence officers, financiers, industry consultants, and journalists. Their work for GRI is frequently referenced by leading think-tanks, financial institutions, military generals, former foreign ministers and leading media outlets, including BBC World, Reuters, The Wall Street Journal, CNN, TIME Magazine and many others. 

Tags: africa, insight, invest, investment, investors, risk, zimbabwe
Posted in Africa, Macro Economics, Politics Risk, Macro Economics, Politics Risk