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Dead wrong: Mugabe promises Zim will get China-driven economic growth

Dead wrong: Mugabe promises Zim will get China-driven economic growth

Dead wrong: Mugabe promises Zim will get China-driven economic growth

By
Published: 27 August 2015

ZIMBABWE – HARARE – President Robert Mugabe pinned his hopes on China helping to revive Zimbabwe’s struggling economy on Tuesday and outlined reforms to investment rules to try to attract more capital.

In his first state of the nation address in eight years, the 91-year-old president, who has presided over economic collapse and diplomatic isolation since he came to power in 1980, said strong growth was just around the corner.

“Zimbabwe is already positioning itself for major economic take-off in keeping with ZIMASSET (economic plan), which requires massive capital injection and rapid implementation,” Mugabe said in a 25-minute speech.

“This has seen government signing key projects with China, covering energy, railways and telecommunication, water, mining, agriculture, and tourism,” he said amid constant jeers from the opposition and cheers from members of his ruling ZANU-PF party.

Although the economy has stabilised since 2009, hopes of a big economic recovery and two million jobs promised by Mugabe’s ruling ZANU-PF party are fading.

The president’s opening comments during a joint sitting of parliament were to thank the country’s security and defence forces in maintaining peace under difficult economic conditions.

Political analysts, however, say with the opposition in disarray following a major split last year and Mugabe having purged possible internal rivals last year, there was no immediate threat to the veteran leader’s grip on power.

“We expect a clear and robust legislative framework … that streamlines investment and … a one stop investment centre,” Mugabe said. “This is now a high and priority matter which those responsible will be held to account.”

A major concern of foreign investors is a law requiring foreign-owned businesses to sell at least 51 percent of their shares to locals. In his speech, Mugabe did not mention the law, which the government says is being constantly reviewed.

He reiterated that the economy would grow 1.5 percent this year, half the initial forecast due to a drought and weak commodity prices.

The drought’s impact is looking particularly serious for Zimbabwe, where the economy has been struggling for five years to recover from a catastrophic recession that was marked by billion percent hyperinflation and widespread food shortages.

A pariah in the west for more than a decade, Mugabe said the government was working to strengthen ties with international lenders like the International Monetary Fund and the World Bank, which Zimbabwe owes $9 billion.

“Current re-engagement efforts with bilateral and multilateral partners … should see improvement of relations and opening up of new financing avenues for long overdue reforms and development cooperation,” he said.

He promised to overhaul investment laws by the end of the year to make it easier to do business and attacked bosses of government-owned firms for huge monthly pay, which, he said “borders on the obscene, reflecting avarice and greed”.

China’s high profile investment in Africa has failed to live up to the hopes of many on the continent and Beijing is now focused on stemming a sharp stock market slide.

Many companies in Zimbabwe are struggling to pay salaries or are forced to close due to power cuts, the high cost of capital and competition from cheap imports.

Labour unions say companies have laid off more than 20,000 workers in the last month alone.

Zimbabwe’s veteran President Robert Mugabe was booed and heckled by opposition lawmakers over the deteriorating economy as he gave his state of the nation address to parliament Tuesday.

Movement for Democratic Change (MDC) lawmakers questioned his economic policies, jeering as the 91-year-old delivered a policy speech which lasted less than half an hour.

He spoke as the UN confirmed earlier estimates that around 1.5 million Zimbabweans or 16 percent of the country’s population will face hunger later this year and need food aid.

When Mugabe — who has been in power since Zimbabwe’s independence from Britain in 1980 — outlined his government’s plan to improve the economy, one lawmaker yelled at him to admit that “you can’t do much about it”.

Mugabe presented a 10-point plan which included boosting agricultural growth, encouraging private sector investment and fighting graft.

“What about job creation?” one opposition member shouted while another accused Mugabe’s government of “corruption”.

Another parliamentarian shouted “if wishes were horses” while his other opposition legislator screamed “you have utterly failed”.

The economy of the southern African nation has been on a downward spiral for more than a decade with slow growth, low liquidity and high unemployment.

Many companies have closed, downsized or relocated to neighbouring countries.

The government has cut its growth forecasts for 2015 to 1.5 percent, from 3.2 percent, mainly due to slow growth in the agricultural sector.

Zimbabwe’s harvest of the staple corn has shrunk by half due to erratic rains and abnormally high temperatures.

The country will need to import 700,000 tonnes of corn to feed those facing hunger in the coming months.

Vice President Emmerson Mnangagwa has already appealed for cash from “development agencies and the private sector”.

The UN’s World Food Programme on Monday said 16 percent of the population “are projected to be food insecure at the peak of the 2015-16 lean season, the period following harvest when food is especially scarce”.

“This represents a 164 percent increase in food insecurity compared to the previous season,” said WFP in a note.

Amidst the heckling, Mugabe — not known for not brooking dissent — continued unfazed and read his speech through to the end.

His ZANU-PF lawmakers then burst into a song praising their leader while the opposition countered singing “ZANU-PF is rotten”.

It is not the first time Mugabe has been jeered in parliament.

In August 2008, MDC deputies roundly booed the president during a speech to show they did not recognise his legitimacy following a flawed presidential vote held earlier that year.