Political life in Zimbabwe, since November’s military coup deposed President Robert Mugabe, has been dominated by the efforts of the Zanu-PF government to woo the major powers and international investors.
President Emmerson Mnangagwa has done so while consolidating his grip on power, using the same generals that installed him in office.
Mnangagwa’s cabinet is led by army personnel, who made themselves millionaires under Mugabe. It includes coup leader Constantino Chiwenga as one of his deputies, alongside Kembo Mohadi, state security minister under Mugabe. General Sibusiso Moyo, who announced Mugabe’s detention on state television, is Foreign Minister and Chief Air Marshal Perence Shiri is Minister of Agriculture, Lands and Rural Resettlement. War Veterans leader Chris Mutsvangwa, who led protests to force Mugabe out, is Information Minister.
To underscore Mnangagwa’s commitment to free market economic reform, Finance Minister Patrick Antony Chinamasa’s first budget was framed as an appeal for investment, matched with pledges to curtail government spending.
Chinamasa’s “new economic order” is centred on a revision of the indigenisation law introduced by Mugabe, which formally required 51/49 percent black Zimbabwean ownership of companies worth more than $500,000. From April 2018, indigenisation will now be restricted to the diamond and platinum extractive industries.
Corporate income tax exemption for five years was announced for the energy sector, to be followed by a permanent rate of just 15 percent. This was accompanied by a tax amnesty on debts acquired prior to December 1, building on an existing amnesty window for the repatriation of public funds taken out of the country through illegal means.
More than 3,000 jobs in the youth service will be eliminated as the centrepiece of measures aimed at cutting public sector employment, accounting for 90 percent of the budget—US$5.1 billion in 2018.
The measures announced point to the extent of corruption within the regime. Headlined is a plan to enforce retirement at 65 from January. Like the attack on youth services, this is a move that will in fact benefit the new military-based faction by eliminating Mugabe loyalists. Bribes will be paid to ensure acquiescence. Staff retiring will be “assisted with access to capital, to facilitate their meaningful contribution towards economic development, including taking advantage of allocated land…”
Other measures include reducing the wage bill by continuing and enforcing the existing freeze on recruitment.
In a clampdown on perks, there will be cuts to free government cars (with a limit of one per person!), fuel benefit, business class travel, the excessive size of overseas delegations, bloated foreign service missions and to local staff bills averaging US$355,000 per mission per month!