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Zim: 'Be very afraid!'
Chris Muronzi, News24 (SA)
July 04, 2007

http://www.fin24.co.za/articles/columnist/display_article.aspx?Nav=ns&lvl2=comp&ArticleID=1518-1522_2141410

"Be very afraid!" is probably the only warning for executives and foreign shareholders in Zimbabwe at the moment. By now, foreign investors must understandably be quaking in their boots after a long week of relentless nationalisation threats. Less than a week ago, Zimbabwe's President Robert Mugabe threatened to nationalize firms, and clampdown on businesses that didn't comply with a government order to slash prices by 50% on basic goods. While investors were still making head or tails of what Mugabe had said and before the dust had even settled, his deputy Joseph Msika was at it again - backing nationalisation threats and accusing business of being "money mongers". The threats came a few days after a "plan to effect a regime change" by a group known as the "Fish Mongers" was unearthed by Zimbabwe's efficient intelligence (it has foiled three coups in recent years including a recent one in which a travel agent and an army private with less than a year in the service stand accused of trying to topple Mugabe).

Although, this is not the first time nationalisation or takeover threats have been made, this is the only time the presidium has joined hands to cow perceived enemies of the state into submission. For these men, both in their ripe ages of 80 plus, it seemed (given their limited options) a relatively prudent idea to shun controversy and mischief at any expense... Although no fingers were pointed at any particular miner on the externalisation of foreign funds charge, Mugabe's government is not popular for sweeping a "life and death" indiscretion like this under the carpet. He threw his former Finance Minister Chris Kuruneri in jail in 2004 on externalisation charges and also ordered the arrests of several key ruling Zanu PF party figures, and his distant nephew on similar charges. Demand for foreign currency here is incredibly strong that street dealers jokingly believe Mugabe also converts his greenbacks or any other foreign currency with black market rates because they say he does not want to be duped by the central bank, whose rates are ridiculously low.

It seems Mugabe and Msika - despite presiding over the current economic crisis characterised by inflation of over 4 500% - are unshaken by the untold suffering of their own people. Instead, analysts say they are only concerned with throwing mud on the business community to gain political mileage ahead of a presidential election next March. To the electorate, however, Mugabe wants to portray the role of a victim and a sensitive leader being vilified by a bunch of serial "money mongers", as Msika put it. Mugabe's side of the story is simple; the evil business community is increasing prices in order to effect an illegal regime change with the full blessings of Tony Blair (soon it will be Gordon Brown) or their Yankee cousins. But Mugabe's critics believe his threat to "crack the whip" on businesses who don't comply with a government order to slash prices is nothing but a futile attempt to win the hearts of a restive electorate and eventually extend his stay in office ahead of the polls next year.

Winning votes through questionable price cuts is not a very feasible strategy, politically, as certain commentators have noted. At the same time, consumers are having the time of their lives as they cash in on cheap goods. The feeling among most Zimbabweans is that the price controls will not last hence they are cashing now on ridiculously low prices of goods. Others warn that should Mugabe proceed with nationalisation of firms, Zimbabwe's economy, which is already teetering on the brink of collapse, could finally exhale its last breath. Should Mugabe follow through on his "seizure" threats, business executives predict production will cease. Manufacturers say they are operating under 30% of their capacity. Ironically, Mugabe's nationalisation threats come at a time state enterprises like power utility ZESA Holdings, steel maker Zisco Steel and a host of other parastatals are making perennial losses under incompetent management. Most parastatals are surviving at the mercy of the central bank, which hands them working capital funds financed through the printing mill.

Mugabe's prolonged stay in power will worsen the country's economic and political problems as many feel that he is the only obstacle to Zimbabwe's economic recovery. Others discounted the threats saying, "Mugabe is no fool". Some believe he is just clamouring for attention like a child. The latter assertion is, however, not fair, given that newspapers around the world love Mugabe's rantings. Fans and critics alike have created websites and blogs for him. "Mugabe should not be showing as much commitment towards overshadowing international headlines such as Chris Benoit's death, Paris Hilton's release from jail, the swearing in of British premier Gordon Brown or even Muamar Gadaffi's bright idea of a United States of Africa (USA). Why does he want attention so much when he knows what will happen to the economy," said Alois Kandere, a manager of a computer consumable shop. Whether the nationalisation talk was the great "plan" or "efforts" within Zanu PF former Finance Minister Simba Makoni was talking about, it is not clear. Makoni made it look as if his party was concerned with the dire state of affairs in the country and "that the state of affairs could not go on". Makoni was participating on the BBC World Debate on Zimbabwe recently. He was fired by Mugabe for pushing for devaluation of the Zimbabwe dollar and called a "saboteur".

Warnings from a fellow Afrexim Bank brother (if it was the west then it would seem like they were pushing a regime change agenda) are that the troubled country should first achieve macro economic stability before embarking on any form of wealth redistribution. On the same programme a World Bank official said the troubled country will make a rapid recovery should Mugabe decide to quit or if leadership changes. He projected economic recovery could be achieved in three years. But if Mugabe lives up to his reputation, and seizes firms, SA businesses in Zimbabwe are going to be the worst hit. For instance, Mzi Khumalo's Metallon Gold Zimbabwe, is the country's largest gold producer and accounts for 60% of the country's bullion output while others such as Standard Bank Group, Absa, Anglo, Implats and Aquarius are exposed through their investments in banking and mining sectors. Maybe after SA's northern neighbour proceeds with nationalisation plans, South Africa's president Thabo Mbeki will drop his "quiet diplomacy" on Zimbabwe.

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