Zimbabwe in 2020: The year of constant outrage

Zimbabwe 2020

Zimbabwe does not produce much in its factories, but we produce political analysts, pundits and prophets in industrial quantities.

Yet, if one among their number tells you that they saw the events of 2020 coming, or that they always knew how to explain them, they need to be laughed out of the room.

Nobody saw it coming; the COVID-19 pandemic and its impact on our economy, the upheavals in our politics, the Ministry of Finance’s currency battles, and all the other moving bits and pieces in between.

It was as if, somewhere in our rusting industrial areas, someone had opened an outrage factory. With each new month came something new and unexpected, keeping the many in a constant state of outrage, January to December.

Here, newZWire looks back at 2020.

January: Doctor’s orders

The year opens with doctors still on strike. Some doctors return to work, after accepting Strive Masiyiwa’s $100m allowance package. The health crisis was to worsen throughout the year.

Over in Washington, Zimbabwe is still on the agenda. US Senators Chris Coons and James Risch write to the US Treasury to “enhance the tools at its disposal” to add pressure on Zimbabwe.

The EU, meanwhile, is more cautious. When it reviews its own sanctions regime, it repeats its routine call for “substantial reforms” and maintains the arms embargo, the only measure that the EU still has on Zimbabwe.

[Click: A 20-year-old quarrel – US senators want more ‘tools against Zimbabwe]

RBZ’s forex wars continue. Central bank freezes the bank account of Chinese engineering firm China Nanchang, accused of “injecting millions of dollars into the parallel forex market.”

The IMF issues a poor report card for Zimbabwe, saying drought, Cyclone Idai, and ‘policy missteps’ were behind the decline of Zimbabwe’s economy in 2019.

February: Vested interests

With sanctions on their man in Zimbabwe looking inevitable after he was publicly pointed out by the US embassy, Trafigura, the global commodities firm, makes a move. It buys out long-time partner Kuda Tagwirei from the local business, which includes Puma Energy.

On the business side, Meikles completes a key transaction, selling its iconic hotel to Dubai’s Albwardy Investments for US$20 million.

The IMF says there are ‘entrenched vested interests’ standing in the way of economic reforms in Zimbabwe.

March: A national disaster

(pic: AP)

Another chapter added to Zimbabwe’s big book of currency tinkering; Finance Minister Mthuli Ncube announces a “managed floating exchange rate system”. He sets up a taskforce to manage the currency, which we say shows a lack of confidence in Mangudya, and policy cowardice on government’s part.

[ZW VIEW | What policy cowardice looks like: taking away Mangudya’s job, but still keeping him]

And then another chapter; Government suspends fungibility of shares in Old Mutual, PPC, Seedco. This reflects government paranoia over the Old Mutual Implied Rate.

Government signals that it could offer land as compensation to farmers protected by investment protection agreements. This is to cause outrage later in the year.

Then, COVID-19 hits the neighbourhood.

South Africa says “We will never close that one (Beitbridge border post). It’s the gateway to the rest of the continent.” This was to change, not long after.

On March 17, President Mnangagwa declares the coronavirus crisis a national disaster, before the country has any confirmed case, a bid to raise resources early to fight the pandemic.

“ED: Our response will neither be arbitrary, nor reckless”

Three days later, on March 20, then Health Minister Obadiah Moyo confirms Zimbabwe’s first positive case of coronavirus. Three days later, Zimbabwe shuts down all borders to traffic, with only cargo allowed in.

On March 23, tragedy happens; Zororo Makamba, the talented TV journalist, aged just 30, is the first to die of COVID-19 in Zimbabwe. His death at Wilkins Hospital lays bare how poorly prepared Zimbabwe is, adds pressure on the government, and inspires intervention in healthcare by private players.

On March 26, RBZ allows free use of US dollars as a response to COVID-19, but fixes the exchange rate at 1:25. A day later, the President announces a 21-day lockdown.

The pandemic is delivering tough blows already; CZI says 88% of its members are failing to bring in raw materials and many have sent workers on unpaid leave.

At the courts, the Supreme Court rules that Nelson Chamisa is not the legitimate leader of the opposition MDC Alliance. More outrage. His allies say the ruling is of no effect; the legal term “brutum fulmen” trends online as the legal eagles explain away the ruling.

But, later, it would turn out they were wrong. What follows is months of fighting for control of the party. The fights undermine the opposition movement, while an equally inept ZANU PF cheers on every new outrage from Harvest House, MDC HQ.

April: When rent is due

The government says, after meetings with ‘multi-sectoral stakeholders’, there is to be a moratorium on prices, which are to remain where they were on March 25.

It also proposes a moratorium on evictions” of tenants. Outrage ensues. Clearly, the belief, then, was that all this would blow over within months.

CZI also says “landlords should be encouraged to show compassion towards…businesses and to restrain themselves from evicting tenants for reasons which are simply beyond their control”.

May: Adversaries

World Bank uses a special health fund to provide US$7 million to Zimbabwe to help the country fight coronavirus.

COVID-19’s impact on the economy is devastating. Zimbabwe says our tourism industry could lose as much as US$1.1 billion, essentially the sector’s entire annual earnings.

At court, a judge rules that government’s 2018 directive to separate local and foreign currency bank balances was unconstitutional. However, in January, the Supreme Court had already ruled that any debts incurred before February 2019, when the local currency was officially re-introduced, could be settled in Zimdollars.

[‘A person can’t just wake up to find their money means something else’ – High Court voids account separation]

The conflict in Mozambique is gaining more attention. In Harare, a SADC Troika Summit is held, where Mnangagwa says the insurgency needs “an enhanced joint action (by SADC)”.

And one more chapter to the forex wars; There is an outrage as RBZ’s Financial Intelligence Unit imposes “temporary limits” on ZIPIT transactions, saying they‘re being used for “illicit forex transactions”.

Three MDC Alliance activists, Joana Mamombe, Netsai Marova and Cecilia Chimbiri, are reportedly abducted and tortured. The government arrests them, accusing the three of making it up.

As the month ends, we get what seems at first to be satire, but is real; America accuses Zimbabwe of interfering in its internal affairs.

White House National Security Adviser Robert O’Brien names Zimbabwe among “foreign adversaries” that he said were trying to take advantage of the George Floyd murder to forment violence in the US.

It seemed the Trump administration had ripped a leaf straight out of the old ZANU PF blame-everyone-but-ourselves playbook.

June: Auctions and suspensions

Zimbabwe summons the American ambassador Brian Nichols over O’Brien’s remarks.

Nichols hits back, in a statement with an unusual amount of froth. He tells the Zimbabwe government that he himself was a descendent of slaves – “my rights and my body were not fully my own”, he said – and then tells government to respect human rights.

Meanwhile, RBZ is still fumbling to stabilise the market. The Bank reinstates the requirement that exporters liquidate their unused forex earnings within 30-days. Central bank also ends the 25% gold incentive, a subsidy criticised by the IMF as a major cause of currency weakness and inflation.

On June 17, RBZ’s currency battles take a fresh path. Central bank introduces a new forex auction system, saying this will bring “transparency and efficiency”. June 23, day one of the auction, sees US$10.34m. The average rate is Z$57.35 per US dollar.

Nurses, doctors and other healthworkers go on strike, demanding US dollar wages and better working conditions.

Across the country, COVID-19 cases are rising and the death toll is climbing. Vulnerable health workers, with inadequate protection, are among the most affected.

On June 26, the government suspends mobile money platforms. There is outrage, and the data shows why; mobile money handles 82.64% of all payments. Government also suspends the Zimbabwe Stock Exchange. It is a damaging shutdown that lasts for a month and erodes what little investor confidence remained among portfolio investors.

[Govt has suspended EcoCash, ZSE over ‘sabotage’. Here are a few numbers to show why this is a bad idea]

July: scandals, farms and hashtags

After a COVID-19 procurement scandal, Mnangagwa sacks Health Minister Moyo for “conduct inappropriate for a Government minister”. Moyo later faces charges of abuse of office.

The sight of Moyo bringing boxes of cash to make bail drives home the point; there are haves, and have-nots.

Over at ZANU-PF headquarters, the paranoia is running high, as ever.

ZANU PF acting spokesman Patrick Chinamasa calls a press conference, and tells reporters: “US ambassador Nichols is a thug”.

Chinamasa also threatens to “eject Old Mutual from the financial system”. There is confusion about what exactly Chinamasa, a former Finance Minister, was trying to say. ZANU PF then releases a “clarification”, saying that Old Mutual should migrate to a new “foreign denominated counter in Zimbabwe”.

Authorities issue a warrant to gain access to EcoCash transactions from January 2 to June 30, purportedly part of a campaign against forex dealers. Econet goes to court to block the warrant. The company says this is part of “an agenda to destroy Econet and remove it from its market leadership position”. The court cancels the warrant.

Government admits that it found no “direct involvement” by Old Mutual and other dual-listed firms in the parallel market. But, RBZ claims a “strong link” between trade in the stocks and price/rate movements.

On July 29, the government signs the “Global Compensation Deed”, under which compensation will be paid to white former farmers for improvements on land acquired under land reform.

There is outrage. While the compensation is not for the land itself, the deal raises criticism that Mnangagwa was “selling out”.

[Zimbabwe has signed a US$3.5bn compensation deal with white farmers. Here’s what you need to know]

Agriculture Minister Perrance Shiri dies. CFU president Andy Pascoe says of Shiri: “He was the first Minister of Lands and Agriculture that we as an organisation were able to engage with in almost 20 years.”

Meanwhile, there’s never a dull day at the power utility, ZESA.

Energy Minister Fortune Chasi orders the board to investigate executive chairman Sydney Gata for corruption. He moves first, firing the board instead. He tells them: ‘It’s because of me that you can now watch Netflix’.

Journalist Hopewell Chin’ono is arrested, accused of inciting violence.

An anti-government protest planned for July 31 is crushed, with authorities saying marches violate COVID19 rules. Dozens are arrested, including MDC spokesperson Fadzayi Mahere and the writer Tsitsi Dangarembga.

The #ZimbabweanLivesMatter social media campaign, meant to highlight injustices in Zimbabwe, attracts world attention, from Jamaican dancehall artistes, the AU and Hollywood.

August: Dark forces, and a dim ZESA

Under sanctions: Kuda Tagwirei

On August 4, Mnangagwa accuses “dark forces both inside and outside our borders” of causing trouble in the country.

On August 5, Kuda Tagwirei and Sakunda are put under US sanctions, accused of having “derailed economic development and harmed the Zimbabwean people through corruption”.

Under pressure, South African President Cyril Ramaphosa says he is sending envoys to Zimbabwe.

There is a long and loud debate over whether to call the situation in Zimbabwe a “crisis” or not.

Responding to ANC’s Ace Magashule remarks on the situation in Zimbabwe, ZANU PF is outraged. They tell ANC not to “speak like Zimbabwe’s prefect”. As ever, the party deploys whataboutism, pointing to killings of civilians by South African soldiers during the COVID-19 lockdown, the Marikana massacre, and Magashule’s alleged role in corruption scandals.

On August 14, Mnangagwa fires Chasi as Energy Minister, saying his “conduct of Government business had become incompatible with the President’s expectations”. In Chasi’s place is now Zhemu Soda, MP for Muzarabani North, who is so little known that there is a hunt online for pictures of the man.

RBZ starts limiting how much mobile users can transact on their phones, and also limits them to one mobile wallet each.

The US clears a US$385m sanctions penalty against CBZ, allowing Zimbabwe’s biggest bank to start rebuilding links with international banks.

On August 31, as had been signaled back in March, Zimbabwe says it will return land to dispossessed farmers who were under Bilateral Investment Protection and Promotion Agreements (BIPPAs).

There is outrage; critics say this is a reversal of land reform. But the ZFU, which represents the bulk of farmers, many of whom benefitted from land reform, supports the compensation plan.

[‘Follow the law, or change it’: Zimbabwe’s biggest farmers’ union sees no land reform reversal under compensation deal]

September: Game and ANC

A conservation group reveals that the government is handing out concessions to two Chinese miners in the Hwange national park, putting game and the environment in danger. There is outrage over this lack of basic sense, and government cancels all mining titles in parks.

A six-member ANC delegation arrives in Harare. ZANU PF says “this is a meeting between the ZANU PF delegation and the ANC delegation only”. The delegation flies back without meeting the opposition and other activists. Despite the outrage, the whole Ramaphosa intervention fizzles out.

ZACC says it has cleared ZESA boss Sydney Gata of four out of the six charges of misconduct he faced. Gata, and the board that he suspended, are allowed to resume work.

October: On our own

Zimbabwe IMF

Finance Minister Mthuli Ncube surprisingly says the impact of coronavirus has not been as severe on the Zimbabwean economy as expected. He suggests Zim may not need a fresh IMF staff monitored program as it is meeting its own targets.

Despite now allowing free trading in US dollars, Ncube still insists Zimbabwe remains on the path of de-dollarisation. In fact, he lectures journalists, ‘de-dollarisation’ isn’t even a real economic term.

The ZSE launches Victoria Falls Stock Exchange (VFEX), the forex-based bourse. Seed Co becomes the first listing.

The IMF projects inflation in Zimbabwe to end the year at 495% and 3% in 2021. Inflation in fact slows to 471.25% in October from 659.4% in September.

November: Water, deals and taxes

Reflecting how hard it is to run a business in Zimbabwe, United Refineries, makers of brands such as Roil cooking oil and Image soap, suspends operations at its Bulawayo factory due to the worsening water crisis in the city. Operations resume a week later.

Delta announces it is to buy Mutare Bottling Company (MBC) from Econet, a deal both companies have chased for years.

[Delta to buy Mutare Bottling Company from Econet, deal quenches old thirst for both firms]

Government launches its five-year economic plan, the National Development Strategy (NDS1), which mainly hopes to boost manufacturing by increasing farm output and mining value addition.

Ncube presents a budget whose highlight is a pile of tough taxes on the informal sector.

Zimborders, which has the contract to rebuild the Beitbridge border post, announces it has reached financial close on the US$296 million project, allowing work to start.

Ongoing works at Beitbridge border

December: Finale

Great Dyke Investments, which is developing the Darwendale platinum project, sells a stake to local firm Fossil. Earlier in the year, Afreximbank competed due diligence on the project.

RBZ announces it is partially privatising its gold refinery unit.

Strive Masiyiwa is named among Bloomberg’s top 50 most influential people of the year, and is appointed to the Netflix board, becoming the company’s first ever African director.

The Zimbabwe Investment and Development Agency (ZIDA) is finally launched, with respected former bank executive Doug Munatsi at the helm.