The joy of a bumper harvest in Zimbabwe is being erased by a severe cash shortage at the banks, making life unbearable for millions of people, who spend hours and days queuing to withdraw their own money. Baffour Ankomah reports from Harare.
The tenacity of Zimbabwe as a nation and Zimbabweans as a people is now being sorely tested as the country goes through a sweet and sour experience where the joy of a bumper harvest in the 2016-17 farming season is being cancelled out by a severe cash shortage that is making life difficult for millions of people, even as presidential and parliamentary elections loom on the horizon.
For the first time in many years, Zimbabwe had a good harvest in the 2016-17 agricultural season, thanks to good rains and a government “Targeted Command Agriculture” programme said to be the brainchild of First Lady, Grace Mugabe. Introduced in July last year, this grain import substitution programme was put under the supervision of Vice-President Emmerson Mnangagwa.
Under the programme, more than 2,000 farmers whose farms were near water bodies, who were capable of dedicating at least 200 hectares to maize, were targeted by the government with loans in the form of irrigation and mechanised equipment, inputs and chemicals, and electricity and water payments.
Each farmer was to produce at least 1,000 tonnes of maize and commit to selling five tonnes per hectare to state-owned buying agencies as a repayment of the loan given them by the government. The remainder of the produce could be kept for the farmer’s personal use.
The whole $192m programme was funded by private money from a local oil company, Sakunda Holdings, that put its faith in the hard work of Zimbabwean farmers and in a government that wanted to attain food self-sufficiency and replenish its strategic grain reserve.
As fate would have it, the heavens opened, the rains came down in generous quantities, and the programme became a great success. The final production figures are yet to be released but are expected to total more than the 2m tonnes the government envisaged. As a result, the government will not import maize (Zimbabwe’s staple food) this year.
There were also bumper harvests in tobacco, cotton, and soya beans. Wheat (which is now in the fields) is likely to go the same way.
Also thanks to a Presidential Input Support Scheme by which, every year, President Robert Mugabe gives free agricultural inputs and assistance to disadvantaged smallholders, the yield of small farmers increased exponentially in the 2016-17 season. As expected, this season’s success has spurred an even greater desire to do better in the 2017-18 agricultural season, which begins in November. Already the government has secured $487m, via Sakunda Holdings and other private sector partners (including Barclays Bank, CBZ Bank, and Ecobank) to put into the second year of the Command Agriculture programme.
This time, instead of the 172,000 hectares planted last year, the government is targeting 350,000 hectares, made up of 290,000 hectares of maize and 60,000 hectares of soya beans. Of the $487m, a good $153m will be put into the Presidential Input Support Scheme for smallholders. Delivery of inputs (70% of which is locally sourced) started on 1 July and will continue until the end of September, by which time all beneficiary farmers would have been covered.
The government is also providing tractors on a district-by-district basis to plough smallholder fields as an incentive to farmers to grow more. A parallel programme for livestock is also underway.
All of a sudden, the optimism in agriculture is back, and the talk now is of big yields next year, in a country that had seen maize production collapsing to 700,000 tonnes a year for the past several seasons. As Zimbabwe’s economy is based on agriculture, the increased agricultural production is expected to positively affect industry and other sectors.
The cash crisis
However, the joy of the bumper harvest is being threatened by a serious cash crisis where, since early 2016, the banks in Zimbabwe have routinely run out of US dollars and thus have not been able to meet the demands of their customers.
The government tried to stem the tide late last year by introducing ‘bond notes’, a quasi currency backed by an Afreximbank $200m facility, but to no avail. Though pegged one to one with the US dollar, the Bond notes have not been the saviour they were thought to be.
Therefore, the second quarter of 2017 has seen a serious deterioration of the cash crisis, to the point where people spend hours and days in winding queues at the banks only to get, sometimes, $20, $50, and at the most $100, or on bad days nothing at all.
Zimbabwe introduced a multi-currency regime in February 2009 after an implosion of the economy in the early 2000s saw the local currency, the Zimbabwe dollar, decimated by hyperinflation. The trauma of those days has left a severe psychological scar on the psyche of Zimbabweans, so much so that they do not want to see their own local currency.
As such, the US dollar has been the main medium of exchange in the country for the past eight years.
Unfortunately, the use of the US dollar as Zimbabwe’s ‘local currency’ is not sustainable, as every dollar in the system has to come from the sale abroad of the country’s minerals, goods, and services. Therefore, if the government or the private sector is not able to sell enough minerals and goods abroad in any one month, it affects the stock of US dollars available locally, thus leading to shortages at the banks.
The government has tried to encourage the use of plastic cards, but though there has been some success, some retailers and service providers refuse to accept cards and insist on cash only.
Unluckily, because Zimbabwe decided to use the US dollar as its local currency without permission from Washington DC, there is not much Harare can do other than soldier on unilaterally and hope – just hope – that a lasting solution can be found soon.
But time is the enemy as the nation moves closer to elections in the first half of 2018.
President Mugabe, now 93, is still the official candidate of the ruling Zanu-PF party, but speculation is rife that he might step aside for Vice President Mnangagwa to assume his mantle. Mnangagwa has worked closely and continuously with the president for the past 55 years, before and after independence.
However, a survey published in early May 2017 by Afrobarometer (the pan-African non-partisan research network that conducts public attitude surveys on democracy, governance, and related issues in more than 35 African countries), showed that 64% of Zimbabwean adults still trust Mugabe ‘somewhat’ or ‘a lot’, while 36% distrust opposition parties.
The survey showed that “there is more trust in the President in rural areas (69%) than urban centres (55%).”
In late July however, his wife, Dr Grace Mugabe, threw a spanner in the works and did the unthinkable by publicly asking her husband to name a successor that the ruling Zanu-PF party could rally behind.
The First Lady made the request at a Zanu-PF Women’s League meeting at the party’s headquarters in the capital, Harare, where TV cameras were rolling. “His word will be final, mark my words; his word will be final. Let him name a successor and see how much I, and all of us, will rally behind him.”
At the time of going to press, Mugabe had not commented on this astonishing development. Does this imply that he will, after all, not contest the elections?
The opposition has been trying to form a united front for months, but differences in opinion between the main opposition leader Morgan Tsvangirai (who has been recovering from cancer of the colon) and Joyce Mujuru (Mugabe’s former vice-president, who was sacked from Zanu-PF in 2014), have not helped the opposition cause