IN A surprising development which will rattle President Emmerson Mnangagwa, his government and the ruling Zanu-PF, Finance minister Mthuli Ncube has openly admitted that his policies have failed and that Zimbabwe is on the brink of implosion.
This has prompted many Zimbabweans who spoke to the Daily News yesterday to say that as welcome as the at-sea Ncube’s admission is, he should resign if he has any modicum of integrity left, or be sacked by Mnangagwa — particularly as he has misleadingly been reporting budgetary surpluses and also painting a rosy picture of the economy all along.
Ncube’s mortifying admission emerged from a letter that the unpopular political greenhorn wrote to international financial institutions last month, which bares to the world the shocking extent of Zimbabwe’s deepening economic rot.
To make matters worse for Ncube himself, Mnangagwa and Zimbabwe at large, the Treasury boss also warned in his letter that the country is on the verge of social unrest, a development he warns could destabilise the entire sub-region.
Former Finance minister in the short-lived but stability-inducing government of unity (GNU), Tendai Biti, was among those who said Ncube should be sacked for his “failures and outright lies about the country’s economy”.
“If you are employed and you fail to perform according to expectations, you should be fired from your post.
“Both Mthuli and his boss (Mnangagwa) should do the honourable thing and resign.
“The problem is that Mthuli doesn’t understand the crisis at hand. He has not lived in the country for many years and is, therefore … out of his depth,” the tough-talking Biti told the Daily News.
“This letter serves to expose the government’s lies about a surplus. The letter shows the extent of the rot.
“In fact, things are worse today than they were in 2007-2008. To undo what Mthuli has done to the economy will take years.
“No one is going to believe his lies because things were already bad before Covid-19,” Biti further told the Daily News.
“The patient was already in the ICU, before the coronavirus pandemic.
“So, they should just ship out and allow a transitional authority to take over because nothing can come from them, and they cannot talk about reforms because they don’t want to implement that,” he added.
University of Zimbabwe political science lecturer Eldred Masunungure also said Ncube’s letter to international lenders had exposed Mnangagwa and his government “very badly”.
“The tragedy of the governance in Zimbabwe is that we are far from being transparent.
“Earlier this week they claimed that the economy would contract by only seven percent, and that is now being shown as completely ridiculous, particularly considering that our economy is on lockdown and also that bigger economies are set to suffer from the effects of coronavirus.
“Of course, Covid-19 is deepening a crisis that was already there. It is tragic that authorities do not share with citizens the dire state of the economy, but this letter has now exposed them,” Masunungure told the Daily News.
He also warned that the government was likely to be confronted by massive demonstrations in the coming months, as the economy got closer to hitting rock bottom.
“What this means politically is that the government has to gear itself up for some form of revolt, something similar to the January 2019 protests.
“Ncube may also have initially underestimated the gravity of the problem and the dynamics of the local political economy.
“Mthuli is also not in the politburo and thus lacks the political muscle. He is too junior in Zanu-PF to drive through what he wants to do,” Masunungure said further.
He also shot down the pledge by Ncube that the government was ready to implement much-needed political reforms.
“They have been pledging to implement reforms since the time of (the late former president Robert) Mugabe.
“I doubt that they will implement any reforms because this will end their rule. They will not reform themselves out of power. It is clear that they fear being ejected from power,” Masunungure added.
In his letter to the International Monetary Fund (IMF), the World Bank (WB) and the African Development Bank (AfDB), Ncube warned that unless Zimbabwe got a financial bailout from international lenders, the country would plunge into an unprecedented economic and health crisis that had been worsened by the global coronavirus pandemic.
The letter dated April 2, also said if the country failed to get a US$200 million rescue package, it would implode — with grave security consequences for the country and all its neighbours.
“The Zimbabwe economy contracted sharply in 2019, amplified by climate shocks that crippled agriculture and electricity generation.
“Growth is projected to contract further in 2020, with domestic demand expected to be significantly depressed from the lockdown put in place as a preventive measure to stop the spread of the virus.
“Cumulatively, Zimbabwe’s economy could contract by between 15 to 20 percent during 2019 and 2020 — this is a massive contraction with very serious social consequences,” Ncube said in his politically naive letter.
“Already 8,5 million Zimbabweans (half the population) are food insecure, from Cyclone Idai and successive droughts, health service are inadequate, and poverty levels are rising. These indicators are expected to worsen.
“Zimbabwe desperately needs urgent international support.
“The global pandemic will take a heavy toll on the health sector, with many lives being lost, and raising poverty to levels not seen in recent times, including worsening food security.
“A domestic collapse also would have potentially adverse regional effects, where spillovers are significant,” Ncube warned further.
He also proposed “a high level and urgent dialogue” with the multilateral lenders to “advance a transformative financial support and arrears clearance plan that can mitigate the looming crisis”.
However, United Kingdom-based legal expert, Alex Magaisa, said Ncube’s letter would not work “because Zimbabwe’s problems had been well-documented before the Covid-19 pandemic”.
“The letter was written at the beginning of April 2020, in the context of the global Covid-19 pandemic, and the plea for debt relief and assistance packaged as a response to that catastrophe.
“However, given Zimbabwe’s long-standing problems, the government is using the pandemic as an opportunity to make a case that has otherwise been on the table for more than a decade,” Magaisa said in his weekly BSR blog.
On his part, economist Tony Hawkins said Ncube should be credited for being forthright with creditors.
“It seems as though the definition of a surplus by government is not the same as that which is in the public and what people are experiencing.
“However, Ncube’s comments about the economy sinking make a lot of sense because it exposes the nonsense that the country’s economy is on a recovery path.
“The distinction between what the government says in public and in private is a cause for concern.
“This shows that the government is not saying the truth. What is said in public is meant to make people feel good, but the truth is that we are in a crisis,” the respected Hawkins said.
This comes as Zimbabwe is in the vice grip of a gigantic economic crisis that is characterised by soaring inflation, skyrocketing prices of basic goods and shortages of key commodities.
The economy is expected to take a further huge hammering as a result of the Covid-19 pandemic.
A lot was expected of Ncube when he was appointed to his position, with many touting him as the poster boy of Mnangagwa’s Cabinet.
However, the former boss of the failed Barbican Bank has disappointed terribly despite his big reputation — and risks going down in history as Zimbabwe’s worst Finance minister ever.
His ill-conceived decision to scrap the multiple currency system in June last year, which was anchored by the stability-inducing US dollar, hammered the last nail in the coffin of the country’s comatose economy.