Eddie Cross's Website

Trying to Explain the Unfathomable

Always something new out of Africa. I have always accepted this adage but right now I think the situation in Zimbabwe is beyond reason. Just try to understand what this regime has done in the past seven days.

Firstly, the President announces a raft of measures on Friday, one of which increases the prices of fuel from about $1.35 to $3.31. Nothing is done to change the policy stance that the Zimbabwean local currency is still valued at 1:1 to the US Dollar and if that is the case then the new price at R44 per litre is now the most expensive fuel in the world or three times the domestic price in South Africa.

Secondly, he then promptly leaves Zimbabwe in a leased Boeing 787 Dreamliner aircraft, probably one of the most sophisticated and luxurious aircraft in the world with an entourage of several dozen, and heads for Moscow. What he is going to do in Moscow is a mystery. Many here do not think he will be given the time of day by President Putin or anyone else.

Thirdly, instead of rotating the Acting Presidency to Mr Mohadi, the other Vice President, he puts his number two, the former General Chiwenga, in charge as Acting President, dumps this burning coal of policy measures in his lap and leaves for two weeks.

Fourthly and predictably, on Sunday the Zimbabwe Congress of Trade Unions (ZCTU) supported by Civil Servants, Teachers and the medical profession call for a National Stay Away to protest at rapidly rising prices and now the dramatic change in fuel prices.

Fifthly, almost as an afterthought, the team somewhere now over the Mediterranean send a message back to Zimbabwe that a system of rebates will be introduced to soften the impact of the massive fuel price rise, and they indicate that the bulk of the new price increase will be in the form of an increase in tariffs on the oil pipeline.

The inevitable happened, on Monday there was widespread rioting accompanied by looting, blockades on roads, door to door harassment by striking workers and threats to any business and institution that remained open. On Tuesday, the crisis in the Country deepened with virtually a complete shutdown of all functioning business and state institutions. No schools were open, the Universities were closed and at 11am the authorities shut down the Internet. In a country where virtually 100% of transactions are conducted electronically, the last measure was the 'piece de resistance'. The country simply came to a halt. The same situation prevailed on Wednesday.

Now if anyone can tell me exactly what the President of the Republic was thinking when he announced these measures, I would be delighted to hear the explanation. But for the life of me, I cannot think of any rational explanation of this series of events.

Today, Thursday, the President remerges from the depths of the Kremlin in the form of a Tweet, which none of us could read because all social media is closed down and we could only see on International News channels. In the Tweet, the President blandly told the people of Zimbabwe that violence would not help find a solution, that in his view the country was on track and that progress was being made. He is reputed to be visiting four former Soviet capitals in Eastern Europe before paying homage at the altar of capitalism in Davos, Switzerland at the end of the month.

So let's try and find a rational explanation. On Monday, the first public action taken by our Acting President was to appear at a meeting in his office of security and military chiefs in full uniform as a General in the Zimbabwe Army. The last time we had seen him in this attire was when he instigated and managed the coup against Mr Mugabe in November 2017. This week, on Monday, he came out of the meeting with Service Chiefs and made a statement that if Law and Order was not restored immediately he would consider imposing Martial Law.

So for me, the first possible explanation for these events is that Retired General Chiwenga saw this as an opportunity to take charge and make his Acting President's role permanent. I have heard rumours of a deal with political elements including the G40 leadership and the opposition, which has been silent and muted all this time. However, it's clear now that what happened at the Monday meeting was not the permanent assumption of power by the Generals, but the refusal by the Zimbabwean professional army, police and security Chiefs to entertain any form of change in the national leadership. What impresses me is the supreme confidence of the President, Mr Mnangagwa, who has continued with his jaunt in Russia and the Far East without any indication that he is concerned or apprehensive about his security over the centre of power at home.

Mr Mnangagwa has been urged by everyone (including yours truly) to return home immediately to take charge and put measures in place which will restore peace and stability and normal activity. Even his closest associates and regional associates have urged the same. However, on Thursday morning, a senior associate, close to the President told me that there has been no indication that he was even going to duck Davos, even though the latter may be a public relations disaster. So the mystery deepens, just what is going on?

Another interesting hypothesis, was put to me by a friend and colleague who said that this was all a plan by the President to deal with the conflict in the cockpit of Government. Ever since the overthrow of Mr Mugabe, the relationship within the centre of power between the competing elements within the ruling party and the civilian and military establishment has been complex and conflicted. This has not been resolved by the 2018 mid-year elections and the conflict between the power brokers in Mnangagwa's regime has led to a conflict over policy and corruption. The result is a paralysis of government in the context of rapidly rising inflation, deteriorating living standards and difficulties meeting commercial obligations.

The author of this hypothesis says that in dumping this hot potato in Chiwenga' s lap, he left him with an insoluble set of problems which can only be resolved by widespread radical market intervention. In terms of this thesis, the reform to the fuel price regime will be followed by floating the domestic currency, devaluing existing debt balances in banks and at the Ministry of Finance and restoring rational market driven relationships between commodities and services. This series of reforms will scrap exchange control, remove the Reserve Bank from foreign exchange allocation which will revert to the market and in doing so, eliminate the major corruption activity which has continued to drain the national economy of resources and threaten the stability of the body politic.

This makes a lot of sense and if it is true, it's the most Machiavellian manoeuvre by a Head of State that I have ever seen. But at what cost? We have over 50 people in hospital with bullet wounds and the number of deaths have not been reported. Five million children have not been at school for a week and the cost to the economy will be enormous. But if it deals with the conflict in the cockpit, maybe, just maybe, we may be able to avoid a crash landing and get back into the sky and on some sort of route to a better future. My warning to my friend and colleague was don't take the people of Zimbabwe for granted. This time there is a quiet determination to get the job done.

Eddie Cross
17th January 2019