Emmerson Mnangagwa is confident he can win lender support and tap capital markets abroad
Johannesburg/Harare — Zimbabwe’s new president, Emmerson Mnangagwa, has a plan to revive one of the world’s worst-performing economies and end its isolation: pay compensation to white farmers whose land was confiscated, sell bonds to rebuild infrastructure and hold internationally acceptable elections.
It’s a tall order for a man who served more than half a century at the side of former president Robert Mugabe and was a key figure in a government that oversaw an economy that halved in size since 2000 and the collapse of the agricultural industry. Yet, Mnangagwa, a 75-year-old former spy chief, remains optimistic he can win lender support and tap international capital markets.
"Can we not do it? We think we should do it," he said of a potential bond sale in an interview on Thursday in Harare. "We really need a substantial investment in the productive economy."
Mnangagwa’s rise to power was problematic. After seemingly Mugabe’s heir apparent for decades, in recent months he clashed with the former president’s wife, Grace Mugabe, and finally fled the country on November 6 after she accused him of plotting a coup. That day, he was fired as vice president, and two hours later he learnt that his life was in danger. He set out for the eastern border with Mozambique and crossed the frontier with his son and three soldiers.
"I could not use the formal border so I used the informal one, which resulted in me walking for over 30km at night," he said, adding that some tracks were filled with land mines. "Because I am a former guerrilla, I understand the area; I operated there."
He took office with the support of the military, which briefly took power and together with the governing Zanu-PF forced Mugabe to resign and put Mnangagwa in his place.
Zimbabwe has approached Interpol to track down former ministers Jonathan Moyo and Saviour Kasukuwere, who fled the country as the military took control, to face criminal charges, he said. Moyo has been critical of the new government, giving media interviews and posting messages on Twitter from an undisclosed location.
Mnangagwa shows no bitterness toward Mugabe, who he served as a right-hand man through the liberation war against Rhodesia and since independence in 1980, and still calls an "icon". Mugabe, 93, is being well looked after in his retirement, he said.
Walls of a passage near his office are decorated with a photo of a poster saying "Mugabe is right", while another shows the former leader shaking the hand of Fidel Castro.
"I have been with the former president for 54 years. I don’t regret it. It was necessary," he said, while admitting that there were increasing demands for change. "The people’s voice, as I say, is the voice of god."
He admits to mistakes of the past, such as the military crackdown against so-called dissidents in the 1980s that resulted in the death of as many as 20,000 civilians from the Ndebele ethnic minority. There may have been "excesses" in the killings in the operation known as Gukurahundi, or the early rain that washes away the chaff in Shona, the language of the majority group to which Mnangagwa and most of his party belong.
Today he faces a dire economic situation: a 90% jobless rate and a cash shortage so severe that some people sleep near banks in the streets of Harare to ensure they can make withdrawals limited to $40 a week.
A programme to redistribute land to black Zimbabweans who were dispossessed during colonial rule slashed exports, and that, together with a series of elections marred by violence and irregularities, prompted sanctions by western countries, hyperinflation and the withdrawal of credit lines by international lenders.
While his plan to compensate white farmers who were dispossessed for the improvements they made on their land "will come to billions down the line", there is no going back, he said.
"We were a colony where our land was taken by the coloniser and we went to war in order to reverse that situation," he said. "The reform was a necessity. It is now behind us, but what we can do is to make sure it is not abused."
But reviving an agricultural industry that was once the envy of neighboring countries is key, as is unlocking investment in mining and reestablishing credit lines. Farmers who lost properties will only be compensated for developments such as dams and barns rather than the land itself.
Caps on farm sizes will be imposed, and all Zimbabweans, including the white farmers who lost their property, are welcome to participate in the industry, he said, while there needs to be investment in processing crops and marketing them. Zimbabwe was once the world’s second-biggest exporter of top-grade tobacco and also exported maize, paprika and roses.
While the government is already in talks with international lenders such as the International Monetary Fund (IMF) about paying arrears and restoring credit lines, it may also sell bonds, he said.
"We are saying this has happened to other countries and it helped them," he said.
Mnangagwa’s administration intends easing a requirement that mining operations be at least 51% owned by black Zimbabweans. While the threshold will be maintained for platinum and diamond mines "for now", it could be lifted following a more thorough examination of those industries, he said. Zimbabwe has the world’s second-biggest reserves of platinum after SA.
The government will also look into building central bank reserves of gold and diamonds with a view to relaunching the nation’s own currency, the Zimbabwe dollar, in several years’ time, the president said. The Zimbabwean currency was abandoned in 2009 after inflation surged to as much as 500-billion per cent, according to IMF estimates. The country currently uses multiple currencies, including the US dollar.
Mnangagwa plans to call elections within the next four to five months, and he is confident Zanu-PF will win, even though the vote will be the first it has contested without Mugabe at the helm. International observers will be invited to oversee the election, and the government will ensure it is free of violence, he said.
The main opposition, the Movement for Democratic Change, is in disarray, with its leader and founder Morgan Tsvangirai, who is battling colon cancer, hinting that he may step down.
"I am actually overconfident, which worries me, but I cannot see another political party in the country today that embraces the wishes of the people," Mnangagwa said. "I believe we are going to succeed."