With the fall of Robert Mugabe from power, people had every right to expect better things in Zimbabwe – or at least for the situation not to get worse. But it seems the country is once again on a downward spiral as strikes and shortages cause unending misery for the population. Report by Baffour Ankomah.
If any country on this earth needs a break from economic suffering, it is Zimbabwe. But there is no hope on the horizon, at least not from the set of circumstances now engulfing the country.
Since 2001 when Robin Cook, the then British Foreign Secretary, arrogantly told President Robert Mugabe’s then Foreign Minister Stan Mudenge that if Zimbabwe did not get rid of Mugabe, what would hit the country would make the citizens stone Mugabe and his Ministers in the streets, it has been one long economic nightmare – induced partly by foreign sanctions and partly by unenforced self-destruction by the elite in power.
Mugabe’s loss of power on 15 November 2017 was partly political and partly economic. His government appeared to have no solution to the economic problems preceding his ouster, especially the shortage (some say ‘disappearance’) of cash in the banks, forcing people to queue for hours inside and outside the banks to get as little as $50 per week.
By the time the political issues led to his overthrow in ‘the coup that was not a coup’, Mugabe’s long-suffering citizens had had enough of him and the economic problems, hence the outpouring of joy in the streets the world saw. Robin Cook’s ghost must have allowed himself a knowing smile wherever he is.
Enter President Emmerson Dambudzo Mnangagwa (popularly called ED after his initials). Having worked closely with Mugabe for 54 years before the ‘coup’, ED was not exactly a new man on the block. But he had massive goodwill from the public when he succeeded Mugabe on 24 November 2017.
Maybe this was because Zimbabweans are a fickle people, prone to shifting allegiances as the chameleon changes its colours. For example, in the immediate aftermath of the military intervention that led to Mugabe’s ouster, soldiers could do no wrong in Zimbabwean eyes. Military boots were in fact polished in the streets by adoring citizens to show their appreciation for the military ‘heroes’.
For leading the intervention, the head of the armed forces, General Constantine Chiwenga, was cheered everywhere he went. But just two months on, when it appeared the military had become too dominant in the post-Mugabe government, the public swiftly turned against the soldiers.
The animosity against the military, and particularly Gen Chiwenga who became Vice-President under ED, has grown to a point where he is now blamed (sometimes comically) for almost everything that goes wrong under ED’s government.
Now the economy has gone so pear-shaped under ED’s watch that people are calling for the return of Mugabe. The fickleness of politics! They say Mugabe was decisive and did not let business and retail houses abuse the public by increasing prices when they wanted. Price controls were very much an integral part of Mugabe’s arsenal.
ED, who served in various positions under Mugabe before and after independence, has taken a different tact. He would not touch price controls even with a barge pole. But that is what is causing him the current economic headaches.
Readers of New African are now aware of the misfiring of ED’s Finance Minister, Prof Mthuli Ncube. When Ncube’s faux pas caused a severe economic upheaval in early October 2018 that led to three weeks of sharp price increases and panic buying, the public expected ED to intervene decisively against the mayhem. But he did not.
His aides explained that he did not want to be seen as following Mugabe’s price-control footsteps. But the law of economics is clear that allowing retailers to increase prices by between 300% and 700% (some in fact went as high as 1,000%), ED was setting his government up for the high jump.
It meant that workers across the board would ask for high pay increases to match the price hikes, and neither ED’s cash-strapped government nor the private sector would be able to meet the wage demands. Which means a season of labour unrest, and with it general discontent and instability.
Strikes and shortages
It was a national security issue that the government strangely toyed with. And as sure as day follows night, trouble started when the country’s junior doctors went on strike on 1 December, asking not only for more pay but also to be paid partly in US dollars, as many businesses (including pharmacies and private hospitals and clinics) were now accepting payment fees in US dollars. The strike went on for 40 days until the government finally succeeded in appeasing the doctors.
But just as the doctors’ union was telling them to go back to work, the country’s teachers took up the chant by refusing to teach when schools reopened after the Christmas holidays, claiming that they had been ‘incapacitated’ because they could not afford the new transport fares provoked by a three-month-long fuel shortage in the country, and also the steep prices in the shops.
The season of discontent was well and kicking across the public sector. The government had to move quickly to avoid a full-scale public sector strike by bringing the civil service unions to the negotiating table to discuss new wage levels. The negotiations were still on at the time of writing.
In the meantime, the three-month fuel shortage that started in early October was making matters worse as motorists now spend days in winding queues at petrol stations, trying to fill up.
And that is not the only woe: In Harare, the capital, water is now being rationed because the only water source. built by the colonialists in the 1950s. cannot meet the demands of an increased city population, and also the low maintenance culture has exacerbated the problem.
Thus, with living conditions eroded by high retail price increases leading to a sharp rise in inflation (in early October inflation stood at 5%; it jumped to 30.01% in November; and topped 42% in December), mixed with fuel shortages, strikes, and threats of strikes, the country was swimming in a brew of high discontent.
In the midst of all this, the President decided to increase the fuel price by 150%, and announce it himself in a televised address, at near midnight, on the eve of his five-nation tour of Europe, starting from Russia, Belarus, Azerbaijan, Kazakhstan and Switzerland (where he attended the World Economic Forum in Davos).
The increase was the second in less than two months. Statistics showed that Zimbabwe’s fuel price was the lowest in the Southern African region, but the President changed all that, making it the highest in the whole wide world! From $1.25 a litre (diesel) and $1.32 a litre (petrol), the President shot the price up to $3.11 a litre (diesel) and $3.31 a litre (petrol).
And to leave nobody in doubt about what type of dollar he was talking about, the President added for good measure: “These prices are predicated on the ruling official exchange rate of 1:1 between the bond note and the United States dollar and also on the need to keep fuel retailers viable.”
In effect, one litre of petrol in Zimbabwe now sells at US$3.31, beating the then highest in the world, Hong Kong (just over US$2.00 a litre) to second place. Monaco, rich as it is, comes third (shy of US$2.00 a litre).
But according to ED, Zimbabwe’s sharp increase was necessary because there had been a “persistent shortfall in the fuel market attributable to the increased fuel usage in the economy [which has been] compounded by rampant illegal currency and fuel trading activities”.
Essentially, therefore, the record high price is to control the population’s consumption of fuel and also to curb the illegal fuel trading activities.
Next, the President announced a contradiction that he and his advisors had not foreseen. “Foreign missions and registered foreign bodies in Zimbabwe as well as tourists could fuel at designated points at US$1.24 per litre for diesel and US$1.32 per litre for petrol.” And that would be only in US dollars.
Here, either the President was saying the bond note and the US dollar were no longer 1:1 as his government insists, or he was giving foreign missions and tourists a whopping rebate because they were not Zimbabweans.
In fact, rebate was mentioned a lot by the President in his televised address. “Cognisant of the need to prevent generalised price increases for goods and services in the country, with the attendant hardships that will entail especially [upon] the commuting workforce, [the] government has decided to grant a rebate to all registered business entities in manufacturing, mining, commerce, agriculture and transport sectors,” ED said.
He went on: “[The] government is putting in place measures to cushion its workers until a full review of the Cost-of Living Adjustment package, due in April 2019, is affected in the context of the current budget,” the President added.
The “cushion” allowance for civil servants – a one-off payment – will range from 22.5% to the lowest paid to 5% to the highest paid. The rest of the population who are not government workers can look after themselves.
With such a policy, nobody was surprised to see outrage in the streets when the Zimbabwe Congress of Trade Unions, the country’s main labour alliance, called for three days of stay-away in protest of the new fuel price and the high cost of living.
The response was eclectic. Unfortunately, some criminal elements took advantage of the protests to cause violence, forcing the government to shut down the Internet and the social media for two days to control communication among the protestors.
Brezh Malaba, a Zimbabwean who tweeted just after the President finished his televised address, spoke for many when he said: “Zimbabwe’s fuel price was pathetically low. We all know that. But the President cannot realistically expect the petrol price to jump from $1.32 to $3.31 without having a domino effect on prices of ALL other goods and services. Brace for inevitable turmoil and immense pain.”