ZW VIEW | As prices rage, ED says he’s done talking, threatens new ‘tools’ against businesses. We’ve seen this before

(pic: Reuters)

Back in November 2018, as prices raged, Obert Mpofu called a press conference.

ZANU PF was angry with “unscrupulous businessmen”, the ruling party’s secretary for administration told reporters.

But Mpofu was also angry at someone else; the new Finance Minister, Mthuli Ncube, and his newly minted “austerity measures”.

“The so-called the new financial reforms which have caused price hikes and the response you have seen from business were done without consultations, and ZANU PF will not allow that,” Mpofu complained.

Chimed in Simon Khaya Moyo, the late party spokesman: “The minister has the full support of the party but there must be realisation that the party was supreme.”

Mnangagwa had shunted Mpofu and other members of the old guard to spend their days idly twiddling their fingers at party HQ, to make way for “technocrats”. The chefs obviously didn’t like it. The economy’s quick stumble after Ncube’s arrival was a good chance for them to stick the knife in.

Yet, Mnangagwa stood by his minister. Ncube narrowed the budget deficits, winning praise from the IMF and others. He tinkered with currency measures – an interbank market and a fixed rate – until he settled for a currency auction that, while flawed, gave some respite to industries.

Two successive droughts and a cyclone came, weakening the economy. Then COVID-19 struck, and Government surprised us all by, for a change, being prepared. Ncube somehow found the money to secure COVID-19 vaccines while other wealthier countries struggled. Long-neglected infrastructure began to get some attention.

Backing Ncube, Mnangagwa said tough measures were the “bitter medicine”, as he put it, needed to fix the economy. Government had to “stay the course”, however unpopular the measures were.

Subsidies, price controls and threats against business were all from the “Old Dispensation”, he told them. This was the “open for business New Dispensation”.

But now, in 2022, as the currency collapses yet again and prices rise faster, all the talk of being pro-business and private sector dialogue has retreated, replaced by the familiar beating of war drums.

As his economic policies fail, Ncube’s public attempts to convince us that he still has some control provide confidence only to content-hungry internet comics than they do to financial markets.

Previous price controls led to shortages


Old school drum beat

The rhetoric from government is taking an old, familiar tone. With no miracles now expected from his star economics man, and even less likely from an even more blundering central bank, Mnangagwa’s last tools may be what ZANU PF has always known; threats and price controls.

In his latest weekly Sunday Mail column, Mnangagwa says he is done talking.

“In respect of extortionate pricing, we have exhausted moral suasion as a way of causing sanity in the market,” he wrote.

He does not hide why he thinks he needs to go after businesses. He is not letting them lose him an election.

“Indiscipline in the market is now so entrenched and even obstinate that it is increasingly becoming a political challenge to the whole establishment,” he says, ominously.

He went on: “It is Government which gets blamed; it is Government which must tackle this wanton abuse in the marketplace. We are determined to do just that.”

Pick your tools

In 2018, when he had to choose between the old political players, all of them proven failures, and the counsel of new and untried ministers, Mnangagwa must have felt that he had time to take a gamble with the new guys.

But, now, a year before the election, it appears he fears he has run out of time.

We have “tools to deal with the problem”, he wrote on Sunday.

He does not say what “tools” these are. But now that Mthuli’s failed tools – from “austerity for prosperity”, fiscal consolidation and the Zimbabwe dollar – have left ZANU PF politically at risk, Mnangagwa can only be talking about the old tools; threats and controls.

And we all know how those ended the last time.

Obert Mpofu, who was Industry Minister in 2007, would know. Then, an order for shops to cut prices by half left shop shelves empty and silenced industries.

Those, definitely, are not the tools – or the optics – one needs going into an election.

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