Mugabe’s finance ministers
Harare - Zimbabwe’s undeviating descent into economic desolation since independence 35 years ago is the parable of an African Rake’s Progress, the rake played by President Robert Mugabe.
A wealthy young nobleman leaves his country home and plunges into the fleshpots of the city, to squander his fortune. The money runs out and he dies in the equivalent of Bedlam, the notorious home for the criminally insane.
An amalgam of the broken-hearted woman he left behind, his betrothed, and the numerous woman that fleeced him, or tried to, is played by his many finance ministers. The money has run out now but the finale is slow in coming.
Mugabe inherited a functioning, prosperous country at independence in 1980; its tarred roads, clean cities, abundant drinkable water, flushing toilets, cheap, good quality food, electricity without power cuts and incorruptible civil servants were a hundred years ahead of the rest of Africa to the north.
“You have inherited the jewel of Africa,” Julius Nyerere, the late Tanzanian president and the elder statesman of Africa, told him then. “Don’t destroy it.” He did, mostly by ignoring basic financial prudence that was urged by most of his finance ministers.
“From Mugabe’s point of view, and of his party, running an economy is not a priority,” said Tony Hawkins, Zimbabwe’s leading economic commentator. “The minister of finance is a milch cow. He (Mugabe) just sends the bill to the minister and says, “You pay”. “
This is the phenomenon that has come to be known in local circles as “Mugonomics.”
Right from the start at independence in 1980 Mugabe made it clear that he was not interested in financial probity. The tight-fisted Scots who ran the Rhodesian exchequer quickly realised what they were up against and took early retirement.
At least in the beginning, his extravagance had an honourable gloss. Dramatic spending on schooling and health produced the most successful education system and primary health care in Africa, by a long shot. Teachers, doctors and nurses were regularly paid and committed, and coped with the massive influx of subjects.
It would be a mistake to draw from this that Mugabe began as a benign reformer. Only two years after he was elected, he had begun to see to the murder of 20,000 civilians in Matabeleland. From the beginning, all Mugabe’s actions were in pursuit of maintaining personal political control, by whatever means.
Ironic now how South Africa’s top black executive class owes so much to a Zimbabwean education; and like them, the thousands of skilled and experienced doctors and nurses who form the core of many British hospitals.
The IMF had provided early tranches of a large loan to Zimbabwe in 1980, but by the time Zimbabwe’s second budget was out a year later, the government had begun its 35-year spending spree and broke its undertakings to stick to a deficit limit imposed by the IMF as a condition for lending. It continued right through until the late 90s when the IMF cut Zimbabwe off.
Zimbabwe’s first finance minister was Enos Nkala, noted for his uncontrollable rages. He knew nothing of finance but appears to have been chosen by Mugabe because he was ZANU(PF)’s treasurer. Like so many other Zimbabwean finance ministers, he read out budget speeches, answered written questions in parliament and was taken by the hand through his duties by his ministry officials.
The next was Bernard Chidzero, the polished international bureaucrat with a PhD from Ottawa in political science, a French-Canadian wife and had spent nearly 20 years in the United Nations, including a term in the senior ranks of UNCTAD, the UN’s trade and development body.
Perhaps even more importantly, he and Mugabe were old school chums, and played together in the school band at Kutama mission near Mugabe’s home to the west of Harare.
“He wasn’t an economist, but being a bureaucrat, he knew what he was doing,” said Hawkins. “Unlike almost anybody ever since.”
Chidzero negotiated with the IMF for a loan for US$100 million. Mugabe was happy to accept the money, but fiercely resisted the terms. In the end, Chidzero managed to get him to agree to cut 20,000 jobs from the civil service and cleared the way for new banks to open, but implementation was half-hearted. Three parastatal organisations, the national marketing bodies for dairy and cotton and a bank, were privatised. The big ones, like Air Zimbabwe, were untouched and continue to bleed the economy.
Then the worst drought of the century struck in 1991 and the IMF’s targets were abandoned.
By this time, Chidzero’s chummy relationship with Mugabe had gone. Cephas Msipa, also a former minister with a close background with Mugabe, describes in his just-published memoirs an incident at the time which eloquently describes the relationship.
Msipa, then the head of the state corporation responsible for agricultural trade, had flown to South Africa, then still under apartheid, to negotiate secretly with its maize marketing body, to buy grain for Zimbabwe’s silos before the drought pushed the price up.
He was immediately summoned to a cabinet committee meeting to explain why he was “causing alarm and despondency” by revealing that the country had no maize stocks. He was fiercely attacked by Mugabe and his ministers. But Msipa warned that if maize was not imported, the government would be thrown out by a hungry populace. Mugabe blanched and relented, but Msipa noticed that Chidzero had failed to speak up.
“Why didn’t you support me?” he asked Chidzero.
“I cannot be seen to be contradicting what the president has said,” was his answer, in the clearest evidence of how Mugabe had reduced even the urbane and confident Chidzero to fearful yes-man.
Chiudzero lasted for 12 years until 1995. Emmerson Munangagwa, now vice-president but notorious for his alleged controlling role as state security minister in the Matabeleland massacres, had a year in 1996. His term was noted for the licensing a dozen of the first “indigenous” black-owned banks banks, all of which collapsed.
Then came the jovial Herbert Murerwa. He told a journalist colleague who met him on the plane from London, that he was on his way home to take up a new cabinet portfolio as finance minister. “I know nothing about finance,” he told my friend, and laughed.
It was under Murerwa in 1997 that Mugabe gave in to threats from the barbarous movement of war veterans, for a gratuity for each of the alleged 50,000 of them (the figure was vastly inflated by bogus veterans) of Zimbabwe dollars 50,000 (then about US$4,000), plus an annual pension payout of Zimbabwe dollars 2,000 (US$160). He made no consultation with Murerwa, the total figure was never made public and it never appeared in budget statements.
The currency crashed 72 percent, and never recovered through to its abolition in 2009, and the local stock market fell 46 percent that day, still commemorated in November as “Black Friday.” Mugabe’s comment at the time: “Who ever heard of a country going bankrupt?”
A year later he delivered another devastating blow to the economy. Again without consulting anyone, he decided to send some 13,000 troops and nearly all of the country’s air force to fight in the war in the Congo on the side of leopard-skin hatted fantacitst, Mobutu Sese Seko.
His intervention achieved nothing but the pointless decimation of the air force, the loss of hundreds of troops and millions of dollars of military equipment.
Shortly after this, international auditors discovered that US$1.85 billion loaned by the IMF, the World Bank and the African Development Bank, had been used to pay for the Congo adventure. The three organisations immediately banished Zimbabwe from their books.
The loan remains unpaid, and Zimbabwe cannot resume lending with any of the three until the full sum is repaid. In another demonstration of the Mugonomics model, the government is looking for someone to lend the government the sum to pay off the debt, which, Mugabe apparently believes, will allow Zimbabwe to resume borrowing from the three multilaterals again.
Simba Makoni, a successful businessman and regarded as one of the few “enlightened” in ZANU(PF), came in in 2000, his tenure coinciding with Mugabe’s launching of the violent expulsion of white farmers from their land, setting off the nation’s economic collapse and the shutting down of government-to-government international aid.
The equable Makoni volubly complained about Mugabe’s refusals to introduce reforms, but it got him nowhere.
Chris Kuruneri’s term of office began in February 2004 and ended abruptly two months later after press reports in South Africa claimed – wrongly - that he was building an eight-bedroom mansion in Sea Point, Cape Town, for Mugabe. For this slur on Mugabe that he had nothing to do with, he was arrested on charges of illegal currency dealing and spent a year in remand prison, after being acquitted on all charges.
He was followed by Murerwa in his third spell as finance minister. By now the economy was in an inflationary spin, and Murerwa pleaded with Mugabe to stop printing money. He was ignored and Mugabe dismissed him as a believer in “bookish economics.”
Samuel Mumbengegwi from 2007-2008 when Zimbabwe experienced the second worst hyperinflation in history, was noted for reading out his budget speech in which he hilariously cited incomprehensible figures in quadrillions and quintillions of Zimbabwe dollars.
The power sharing government forced on Mugabe by SADC in 2009 saw pro-democracy leader Morgan Tsvangirai’s right-hand man, Tendai Biti, as finance minister. Biti was a lawyer and an intelligent man. “He knew nothing about economics when he started but he picked it up quickly,” said Hawkins.
Mugabe loathed Biti. In 2009, during the world economic crash, the IMF created a special drawing rights issue which was paid to all members of the fund, including chronic delinquents like Zimbabwe, to help tide them over the crisis.
The money was meant to stabilise economies and to remain in governments’ reserves. Zimbabwe got SDR 93 million and Mugabe demanded that Biti hand it over. Biti refused and there was nothing Mugabe could do about it. The sum is still in safekeeping.
ZANU(PF)’s fraudulent election victory in 2013 allowed him to get rid of Biti, and replace him with ZANU(PF) veteran minister Patrick Chinamasa.
The country’s national budget this year was worth only US$ 4 billion, the economy is in deflation and in a burgeoning crisis. The sensible and serious Chinamasa was eager to get down to the business of reform. His first move was to announce that the 13th paycheck bonus that civil servants have expected for decades could not be paid this Christmas. The government was flat broke, Chinamasa said.
Nonsense, said Mugabe, who this year spent US$33 million on air travel, and assured civil servants that they would be paid their bonus. Now only nine days to Christmas, and not even the army has had its bonus. Most civil servants have not been paid anything for months.
Much the same happened to Chinamasa’s hopes to dilute Zimbabwe’s obnoxious “indigenisation” policies that forces white- and foreign-owned companies to provide 51 percent of their equity to blacks.
“In 2016 we will not accept a company which refuses and rejects our policy of indigenisation and empowerment,” Mugabe ranted at the party’s annual; conference last week. “No, we have our own philosophy, ideology and we believe that our natural resources are our own. We don’t share them with anyone.”
However, after the weekend’s debacle over the dizzying switching of South Africa’s finance ministers, Hawkins commented: “If you think Mugabe is bad, look at Zuma.”
