Business courts elusive Mugabe

Business courts elusive Mugabe
President Robert Mugabe

President Robert Mugabe

US President Donald Trump’s first big meeting, three days after his inauguration, was with the chief executives of America’s 12 largest corporations. A decidedly pro-business president, Trump used the meeting to detail his plans to cut corporate tax and reduce regulation.

The last time President Robert Mugabe met business leaders, in 2007, Trump was doing Wrestlemania stunts with Vince McMahon and twoterm US President Barack Obama was not even president yet. However, with dark clouds fast gathering around the economy, Zimbabwe’s business leaders last week trooped to State House to meet Mugabe, ten years after a similar meeting, providing a striking symmetry with current, worsening conditions.

Luxury saloons, fuel-guzzling SUVs and the pristine setting, on State House’s meticulously manicured lawns belied the palpable sense of crisis that lent a sense of emergency to the meeting. Mugabe, in a sharp grey business suit, looked every bit the chief executive of Zimbabwe Inc that he is as he received the executives.  He was complemented by his wife, Grace, who looked regal, spotting a turban and a diamond encrusted necklace.

fin de règne

Three years ago, Grace shirked her demure public persona and plunged into ZANU-PF politics, with possibly the most far-reaching impact of any single event in the party’s history. After easily establishing herself as the most influential figure in ZANU-PF after her husband, Grace has increasingly sought to extend her influence in government.

So, while her presence at last week’s business summit  essentially meant to be a sleeves-rolledup government function drew quizzical glances from some, it was almost expected by many who have come to understand, even accept, her scarcely masked influence on her husband and, by extension, government. However, with unprecedented political in-fighting in the ruling party over Mugabe’ succession amid an unmistakable fin de règne mood, political interpretations often tinge any significant event in government.

The back-story to last week’s meeting suggests that it was initiated by business through Vice President Emmerson Mnangagwa, touted among Mugabe’s potential successors. Mrs Mugabe has emerged as a major stumbling block  some would say wrecking ball  for Mnangagwa’s mooted ambition. With the meeting taking place in between two contentious ZANU-PF meetings, the Politburo on Wednesday and central committee on Friday, where Grace and Mnangagwa’s proxies frequently joust, the political reading was inevitable. Also in tow was ZANUPF youth leader, a key player in Grace’s attack dog politics, whose interest in the economic dialogue could not be immediately established.

Two days after Mugabe’s meeting with business, Grace was to publicly complain, at a party rally in Bindura, that ministers gave inordinate regard to Mnangagwa at the expense of his co-Vice President, Phelekezela Mphoko.

Vice President Phelekezela Mphoko

Vice President Phelekezela Mphoko

Messenger is the message

While intent on making their case, business leaders also knew they would have to navigate the minefield that is the Mugabe government. Apart from finding the “right” language and striking the appropriate tone, business needed an acceptable messenger to convey its message. In politically treacherous Zimbabwe, the messenger is often the message.

Here, business was saying: “We have concerns, but we come in peace.” Enter Charles Msipa, the amiable Schweppes Zimbabwe chief executive and former president of the Confederation of Zimbabwe Industries (CZI), who acted as spokesperson for the business delegation. Last October, when Msipa’s father, liberation hero Cephas died, the family wanted to bury him next to his wife at the Gweru provincial heroes acre, and not at the national shrine in Harare.

The late Msipa, whom Mugabe referred to as “sekuru” (uncle), had been one of Mugabe’s closest friends for decades until the two became politically estranged later in life. With the Msipa family all set to bury the former minister next to his late wife in Gweru, Mugabe intervened, not as president, but as a relative, to change the burial plans upon his return from a Common Market for Eastern and Southern Africa (Comesa) meeting in Madagascar.  Mugabe pleaded with the Msipas, mentioning Charles by name, to allow the family patriarch to be buried at the Heroes Acre. Last week, business leaders turned to Charles to plead their case with Mugabe.

Enemy business

The country’s captains of industry have often courted scorn from critics who consider their approach to be obsequious and ineffective, but, running businesses in one of the most fluid environments one can find, they have come to be quite adroit at navigating the treacherous terrain. And, in fairness, their interlocutor is not known for taking criticism well. In the past, the Mugabe government has accused business of sabotaging the economy as part of a western-driven regime change agenda.

“I have been there, 2002-2008 when business was viewed as (the) enemy. We achieved nothing by being viciously factual, negative and aggressive,” former CZI president Busisa Moyo said in a Twitter response to calls for business to be more robust in its engagement with government. “We didn’t think going in hard was the right strategy. The fact His Excellency (Mugabe) agreed to meet shows they (are also) concerned about the economy,” Moyo said in yet another tweet.

Oil Expressers Association of Zimbabwe president, Busisa Moyo

Oil Expressers Association of Zimbabwe president, Busisa Moyo

Progress, but…

As a strategy, business sought to play up the positive, opening with an upbeat tone “the economy is poised for a rebound” and acknowledged progress made in terms of food security, infrastructure development and initiatives such as the establishment of Special Economic Zones.

They also noted ‘steady progress on reforms’, citing the stabilisation of the financial sector through the mopping up of bad loans by ZAMCO and engagement with multilateral lenders. But they did make their case against the cost of doing business in the country, which they told Mugabe was 20 percent higher than its regional peers, chiefly due to high utility tariffs, government levies and taxes, high finance costs and the corruption tax.

Business also urged Mugabe and government to the investment environment and promote FDI. “Most important is the need to ensure policy coherence and consistency, so as to entrench macroeconomic fundamentals for the economy,” business said. They also cautioned government against unrestrained spending. “Fiscal sustainability and financial sector stability are like Siamese twins and for Zimbabwe, long term financial stability is premised on fiscal sustainability,” they added. “This requires immediate government attention and comprehensive review.

The current levels of fiscal deficit and the mode of financing, against diminished fiscal revenue sources, is measurably unsustainable.” Business identified state enterprise reforms as a key factor in attaining fiscal sustainability.

‘You won’t go to jail’

In his response, Mugabe largely made the right noises, including intentions, made in graphic funereal terms, to bury loss-making state enterprises. He also said government accepts that Zimbabwe’s economic growth has to be led by the private sector. Interestingly, Mugabe encouraged the business leaders to give him their honest views on the country’s economic situation. “(If) you, as the private sector, may be opposed to government policy, say so. No one will go to jail,” Mugabe pleaded.

“I hope the next time we meet will not be after another 10 years… As a request, I would then want us to meet in a relaxed set-up and have dialogue and not have sermons for each other like we did today. “I want you to tell me the things that are wrong with our economy. No one will go to jail for being honest. So the next time we meet, I want you to tell me your concerns,” Mugabe said. It has been proposed that Mugabe holds quarterly meetings with business.

newsdesk@fingaz.co.zw

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  • Tarubva Chibva

    The last time there was dialogue, the economy imploded barely a year later and it was an election year.

    Hope, history’s tendencies of repetition won’t hound us

  • brian chiro

    No one will go to jail guys

  • brian chiro

    No one will go to jail guys !!

  • Timothy Thorton

    A misconception hat has preoccupied both business and the private sector is the notion that state enterprises are a burden to the economy. This is a fallacy paddled by people who are not honest or ignorant of the working of the economy. SE do not exist in isolation from the rest of the economy. The whole economy is in shambles not because of SE but because of bad macro-economic policies. SE are essentially setup to assist the private sector. Their performance is simply a reflection of the performance of the economy led by private sector which is the key driver of the economy. SE are funded by the private sector through taxes, but the under performance of the PS will cascade to SEs. Industry through the CZI survey has consistently revealed that it has been operating at an average of 35%. That statistic has been taken lightly but under performance of large businesses represented by the CZI has a serious knock on effect to the rest of the economy as large businesses are major consumers of products and services from the rest of the economy particularly State Enterprises. Zimalloys, Zimasco, Sable Chemicals provided the bulky of business to ZESA and the NRZ, and if they struggle then these SEs would also struggle.

    We need SE to support the economy and a performing economy will be able to finance any deficit created by these SE as their contribution is key to generating government revenue. It is important to understand that SEs are not direct profit making institutions. They facilitate private sector business which is the engine of the economy.

    Government must however be discouraged from investing in those areas where the private sector has got capacity.

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