President Cyril Ramaphosa and Zimbabwean president Emmerson Mnangagwa. Picture: ELMOND JIYANE
President Cyril Ramaphosa and Zimbabwean president Emmerson Mnangagwa. Picture: ELMOND JIYANE

How do you solve a problem like Zimbabwe?

Fourteen months after Robert Mugabe stepped down as president of SA’s northern neighbour, another cash crunch and more violent protests met with the deadly, oppressive arm of Zanu-PF, has put an end to any illusions that the country may finally be “open for business”.

It shouldn’t be this way. In August 2018, shortly after Emmerson Mnangagwa was declared the winner of a hotly disputed election, the World Bank said Zimbabwe “can easily become an upper middle-income country” in as little as five to 10 years.

Speaking to Bloomberg, the World Bank’s vice-president for Africa Hafez Ghanem explained the country, where unemployment is estimated to be as high as 90%, has “huge potential”, “some of the most educated people on our continent”, and abundant natural resources.

What it doesn’t have, however, are politicians with any real appetite for reform.

Zanu-PF, who came to power at independence from the UK in 1980, has a long track record of quashing dissent with deadly violence. This, coupled with chronic economic mismanagement, has left millions of Zimbabweans either destitute, in despair, or in exile.

In direct contrast to SA, since the violent crackdown on protests in recent weeks, the EU, UK and US have all called for increased pressure and sanctions.

The main opposition, the Movement for Democratic Change (MDC), hasn’t covered itself in glory in recent years either, with internal fighting and breakaway factions weakening an alternative for Zimbabweans.

SA, by endorsing Zanu-PF’s violence and election-rigging in 2008, is no innocent bystander. With the ANC’s close ties to Mnangagwa's  party and its near disdain for the MDC, SA’s policy towards its neighbour is unlikely to change.

This has been underlined by President Cyril Ramaphosa’s request at the World Economic Forum in Davos — at a time when soldiers were killing civilians  protesting over massive fuel hikes — that sanctions on the country be lifted, echoing Zanu-PF’s language that it is hurting the economy. International relations minister Lindiwe Sisulu has also promised financial support.

Sanctions are a polarising issue. Proponents say existing sanctions, which include an arms embargo, are not sweeping trade and economic sanctions. They have also been scaled down over the past few years, notably by the EU, and target individuals and entities implicated in human-rights abuses. Opponents either say they hurt the economy, or are so ineffective that they may as well be scrapped, thereby removing their use as a political scapegoat.

In direct contrast to SA, since the violent crackdown on protests in recent weeks, the EU, UK and US have all called for increased pressure and sanctions.

The real cause of Zimbabwe's economic woes, of course, is the regime’s attack on property rights in the early 2000s, which saw the agricultural sector and foreign investment all but collapse. This, coupled with Zanu-PF’s complete disregard for fiscal prudence and central bank independence, rung in a period of hyperinflation and ultimately the dollarisation of the economy in 2009.

The introduction of bond notes, linked 1:1 to the US dollar, in 2016 was meant to help ease a shortage of US dollar notes in the economy. It hasn’t taken long for the central bank to start printing bond notes without any US dollar backing, ringing in a new era of rising inflation, black-market money exchanges and differing prices, depending on whether you’re paying in hard currency, bond notes, or Ecocash (mobile money). As is often the case in markets where there is opportunity for arbitrage, it also created a number of dollar millionaires keen to keep the feeding trough intact. 

Some believe the solution is for Zimbabwe to join the rand monetary union. This would require Mnangagwa’s government to curtail its spending drastically, pay off debt, and — arguably the most unpalatable of all — submit to SA when it comes to monetary policy. There will be no more room for “surrogate” currencies, printing money or raiding exporters’ foreign exchange accounts when reserves run dry. It would be nigh impossible to take their assurances seriously.

More concerning in the short term is the possibility that finance minister Tito Mboweni may provide loans or other financing to Zimbabwe. This may help alleviate short-term cash flow, but we should be under no illusion that we will be throwing good money after bad.

It will do nothing but help maintain an intolerable status quo in a country in crisis.