(Last Updated on December 7, 2015 by Editor)
ZIMBABWE – First Lady Grace Mugabe may have proven she is an intellectual novice in matters political with her knee-jerk and furious pronouncements over the importation of foreign products during a rally in Murewa two weeks ago.
The utterances clearly lacked fundamental substance and she might have touched a raw nerve on Zimbabwe’s current economic problems and lack of manufacturing capacity. Grace threatened to shut down of the country’s borders to stop foreign produce from getting into the country.
With manufacturing capacity at an average 35%, Zimbabwe can certainly not afford to completely shut out foreign products; but through Grace’s declaration, the country’s administrators will find themselves between the proverbial hard rock and the devil’s gorge.
Since her controversial entry into Zimbabwe’s political minefield, Grace has picked those issues that were deemed taboo by the country’s elite.
From accusing a sitting vice-president of corruption, nepotism and the ultimate crime of treason, Grace has now entered the economic fray in which she has scant knowledge. Analysts concur that her latest public pronouncement could send jitters in local, regional and international business circles.
“The conflation of the State and ruling party in Zimbabwe make public pronouncements made at rallies and other such rudimentary platforms policy. The issues that are raised by senior ruling party figures ordinarily turn into national policy because the party drives government,” said an analyst who declined to be identified.
During the Murewa rally, Grace said: “Let us protect our local industry. We must stand firm against the importation of products that are available locally. We say no to importation of chickens, vegetables and tomatoes. We must value-add our products and work hard in production so that we stop importing things that we can produce.
“That is corruption and you are provoking women. Down with corruption. We will go and stop those trucks from crossing into Zimbabwe].
“It is inappropriate to import agricultural produce when we are trying to promote Zim Asset by generating our own food. We will block those trucks bringing in produce from outside the country,” President Robert Mugabe’s wife said.
Reports have identified Grace as a potential successor to 91-year-old Mugabe who is battling failing health and old age. Since her appointment as the ruling Zanu PF party’s women’s league boss last year, Grace has gone around the country asserting her authority, leading commentators to assume that she might be building a political profile for herself and positioning herself for the ultimate power game.
Left leaning economist Prosper Chitambara said Grace’s utterances could pose a danger to economic integration and could spark trade wars.
“I do not agree with her given the trajectory the global economy is taking. A subsidy policy in this age will not be sustainable. It could cause trade wars in the region and beyond and Zimbabwe is currently so weak economically it cannot afford a fight with even the poorest countries in the region, let alone its biggest trading partners like South Africa,” Chitambara said.
He added that Zimbabwe needed to deal with the structural challenges the economy was facing as well as fundamental economic issues relating to investment policies.
“We need to deal with issues of competitiveness. Zimbabwe should address the structural issues first. Consumers should be considered as well because they deserve the choices. They choose to buy even expensive products from other countries because of issues like quality and variety.
“Protectionist policies in the modern era will not survive. But if we decide we really need subsidies and feel duty bound to protect local industry and producers of various commodities, we need an indirect route such as support for, particular line of products,” said Chitambara.
“Most countries provide subsidies and cheap finance to certain products as a way of undercutting foreign competition and providing the market with quality but well-priced goods. In fact, it should be understood that Zimbabwe for a very long time pursued the protectionist policy but it never worked”.
However, another renowned economist John Robertson seemed to agree with Grace. He said Zimbabwe needed a protectionist policy but urged a critical look into economic fundamentals to correct the competitiveness of local manufacturing, as well as price disparities.
“I think it is a reasonable argument that could, within reason, be implemented but we need to deal with structural issues first. The reason people opt for foreign products is that they are cheaper and possibly of higher quality despite the long distances they would have been transported through,” Robertson said.
He argued that Grace’s argument was likely to be met with stiff resistance from government apparatchiks who have benefitted economically from the mess at home.
“Most of the people in government who are at the levers of power have benefitted from giving themselves import permits. Even if they are going to impose a ban, or better still, introduce a subsidy, those in government who have permits can still tip-toe around such things by inspiring the crafting of legislation to continue importing the foreign goods,” said Robertson. “But no one will openly challenge her now or in the near future because they will be used as an example.”
Robertson said a protectionist policy would only be viable in the long-term.
“They cannot just wake up and introduce that kind of policy because there will be a vacuum given the erratic supplies coming into the market from local producers. There is need to make sure there is consistent supply that can be quantified but then an announcement can be made, for example, that potatoes and tomatoes will be banned next March,” he said.
Experts claim that at least 80% of products in Zimbabwean shops are foreign in the aftermath of the economic meltdown that was exacerbated by a decline in agricultural production.
The country’s new farmers have struggled to match production levels that existed before the chaotic land reform programme. The land expropriations turned the country into a basket case and net importer of even such mundane things as tooth-picks.
Mugabe’s government also tried, albeit unsuccessfully, to ban genetically modified products (GMO) but they have always been smuggled into the country and Robertson said any haphazard implementation of subsidies or ban on foreign products could result in chaos at ports of entry and possible re-emergence of smuggling rackets “that will be almost impossible to contain”.