Chinamasa's disastrous IMF gamble

HARARE - Finance minister Patrick Chinamasa’s hasty decision to pay $1,8 billion debt to the International Monetary Fund (IMF) is probably the single most momentous event since the death of the Zimdollar.

In an era that has seen calamitous economic events such as record breaking hyperinflation, the disastrous land reform programme that gutted commercial agriculture and the adoption of other countries’ currencies as legal tender despite all those platitudes about sovereignty, the $1,8 billion payment to the IMF negotiated at the Lima meetings last September is probably as momentous an event as the demise of the much-derided Zimdollar.

It’s a game changer. It has the potential to rearrange or remake Zimbabwe’s politics and future.

But more importantly, it could lead to the consummation of another GNU or transitional authority. I will come back to this later.

It is ironic that President Robert Mugabe’s obstinate government, who in their heyday told off the Breton Woods institutions, could now be as fearful of an impending economic implosion as to want to retire an odious debt accrued as far back as 1999.

Chinamasa’s decision to amortise that debt should count as one of the biggest blunders of this administration, probably foolish enough to make Baba Tencen’s mungandidii, ende hapana zvamungandiita’s funny videos.

Chinamasa may have thought that by paying off the $1,8 billion he would finally be able to rebuild relations with the Bretton Woods institutions and access fresh capital from the IMF.

The gamble backfired spectacularly.

He has just returned home empty-handed after paying off those billions over the past 10 months amid tight finances back home.

That payment to the IMF has obviously left a huge hole on the government’s finances, with the stuttering administration now even failing to pay its workers.

Did Chinamasa not realise the rump of anti-Mugabe feeling, especially within Washington, largely as a result of the nonagenarian’s unhelpful anti-Western bombast?

Giving Chinamasa fresh loans would be akin to propping up the Mugabe regime! There is simply no Washington consensus for that kind of thing right now.

It boggles the mind why Chinamasa threw caution to the wind when chairman of the US Senate Foreign Relations Committee Bob Corker in January made a clear presentation in a letter to US Secretary of the Treasury, Jack Lew, that Washington would never approve loans to Zimbabwe as long as Mugabe is ensconced on the throne.

“Without meaningful progress toward long awaited reforms by the Mugabe regime, new lending could significantly alter internal political dynamics and help entrench the very same individuals responsible for the country’s economic collapse and gross human rights violations,” Corker’s letter said, adding  the Obama administration should use its voice and vote at international financial institutions to ensure that any new lending to Zimbabwe be preceded by meaningful progress toward clear benchmarks for the restoration of the rule of law, including respect for private property, free press, freedom of speech, and freedom of assembly..

Chinamasa may have thought he would be the leader to rebuild relations with Washington — which sourced at the turn of the millennium over Harare’s delinquency in amortising its debt. As we count the cost, the outcome has left wreckage all over the place.

In corridors of power, bureaucrats are picking their jaws off the floor and having their “we told you so” moment. How could this have happened? How could Chinamasa be so dim-witted?

The IMF, which deftly coaxed Harare to settle the debt, is leaving the carnage behind and wandering off into the political sunset. It’s as if head of the IMF’s Staff Monitored Programme, Domenica Fanizza,  is saying to Chinamasa: “You have made your bed. Now you lie in it. At least we got our money, which we never dreamt of getting in the first place.”

The entire political establishment at Munhumutapa seem to be in turmoil over the IMF snub.

They had hoped to use that money to pay off civil servants and settle off other pressing government obligations.

Diplomats assert the winners in this debacle could be the opposition, only if they may find each other urgently. Western diplomats speculate that Washington, or rather the IMF, may consider a loan to Harare if there is a transitional authority comprising Zanu PF and the opposition.

That is the only way to avert an impending, potentially painful and devastating economic recession for Mugabe and Zanu PF.

Mugabe and his party will not be too pleased to have to go to bed with the opposition again.

Such a scenario would not bode well for that reeling party, given that the opposition would be going into this arrangement with their eyes wide open after being dribbled by the sly Mugabe regime during the 2009-2013 GNU.

And Washington would insist that the transitional authority’s sole mandate be to prepare for fresh, unriggable elections.

With hordes of desperate Zimbabwean migrants trooping into South Africa as the economy implodes here, something has to give. After all Zimbabwe is so important to SA, with Pretoria exporting goods worth over $275 million to Harare annually.

Mugabe is not going to give in to this transitional authority arrangement on a silver platter. The process will need a resolute and deft midwife.

Naturally that midwife will have to be the Sadc chairman, given the potential for contagion from Zimbabwe’s economic implosion.

But the current Sadc chairman Ian Khama — tainted by allegations of sympathising with the opposition — will be unacceptable to Mugabe as an arbiter in the talks. 

That means South Africa’s political leaders of goodwill should step up to the plate and use their influence to encourage a pragmatic settlement in Zimbabwe. That is why the next South Africa presidential polls early next year are crucial to this process.

That election must produce an organic intellectual as president such as current SA deputy president Cyril Ramaphosa, the chief ANC negotiator in the talks that led to the transition to democracy in 1994, or current African Union Commission head and anti-apartheid activist Nkosazana Dlamini-Zuma. Those two have the wherewithal to steer the negotiations between Mugabe and the opposition coalition.

It would seem Mugabe has respect for both Ramaphosa and Dlamini-Zuma, the same way he respected Thabo Mbeki who birthed the 2009 GNU.

It is time the opposition put its house in order, unite, and prepare for this round of talks. There is simply no other way, and the grand opposition coalition need to exploit this impending economic implosion shamelessly.

The dire government finances and looming mass protests is wreaking havoc on this besieged government. The Mugabe government is on the ropes and knows its administration will unravel in the near-term if a solution is not found soon. 2018 is simply too far for them to go it alone.

Chinamasa may have been confident of victory in the IMF talks, but as United States Navy admiral once remarked, “The devil is in the details, but so is salvation.” And Chinamasa better learn, a tiger will never change its spots.

Comments (8)

Well done VaChinamasa musaterera the voice ravadzivisi. Makagona whether tapiwa mari with IMF or not still makagona Chikwereti chinongoda kudzorerwa. ZIM shall shine again Amen

SHUNBA - 13 July 2016

your paper's online version is always a day behind Why?

weasel - 13 July 2016

The top echelons of this government is too busy enriching themselves to make any meaningful decisions. It appears that Mugabe cfondones corruption and mismanagement. All done so that he may remain in power. It is patronage.

vortex - 14 July 2016

Excellent article. Thank you Daily News. Though getting Mugabe's government to place the people first is rather a far fetched thought. The current dictatorship is interested only in self-aggrandisement.

Tekere - 16 July 2016

So now we have new breed of tiger. It has spots. Hezvo!

fugari - 17 July 2016

APPLY FOR AN URGEBT BUSINESS LOAN NOW AT VINCENTLANCEJESSY@GMAIL.COM

Vincent Lance Jessy - 12 September 2016

Public service... We offer all kind of loan presently @3% interest rate. Applicant should email enquiry.petbeckyloan@outlook.co for info.

Petterson Rebecca - 22 September 2016

i can hack any data base . contact me and tell me what you want me too hack for you

Loya - 14 October 2016

Post a comment

Readers are kindly requested to refrain from using abusive, vulgar, racist, tribalistic, sexist, discriminatory and hurtful language when posting their comments on the Daily News website.
Those who transgress this civilised etiquette will be barred from contributing to our online discussions.
- Editor

Your email address will not be shared.