Mugabe's legacy may be remembered as one of economic destruction
HARARE - Zimbabwe’s business sector will remember former leader, Robert Mugabe – who has died at the age of 95 – as a strongman and populist leader who also tried to economically empower Zimbabweans to be active in the economy despite the controversies that dogged such policies.
The country’s economy, once the breadbasket of the southern Africa region, has lurched from one crisis on to the next.
Mugabe is mostly blamed for Zimbabwe’s economic struggles because of his populist policies which were pinned on expensive subsidies.
His successor, Emerson Mnangagwa, is now trying to reverse some of the disastrous polies under Mugabe but this has only worsened the economy.
Economist Vince Musewe on Friday quoted William Shakespeare after confirmation of news that Mugabe had died, saying “the evil that men do lives after them; the good is oft interred” with their bones.
“And that is exactly how I feel after years of economic mismanagement leaving once a wealthy vibrant country poorer more divided & struggling. A generation of arrested development,” said Musewe.
Mugabe’s populist policies include the empowerment legislation which sought to place the control of all foreign owned companies into the hands of black Zimbabweans. Mnangagwa is now reversing this through abolishing the Economic Empowerment Act.
Earlier, Mugabe had embarked on a disastrous land expropriation without compensation policy that South Africa’s ANC has been warned not to follow.
This destroyed Zimbabwe’s agriculture sector and drove away productive white farmers from their land. However, Mugabe is celebrated for the idea of giving land into the hands of black Zimbabweans although the process turned violent and deadly.
As with the indegenisation law, Mnangagwa has charged current Finance Minister to sort out compensation to the displaced white farmers and has been at pains to stop further farm invasions.
Mugabe’s legacy will likely mostly be one of economic destruction, especially after allowing central bank governor, John Mangudya to introduce bond notes at an exchange rate of 1:1 the US Dollar following the abandonment of the country’s own currency in 2009.
Mnangagwa is also having to clean up the bond notes mess created under Mugabe, with banking sector executives saying introduction of the Zimdollar after Mugabe’s departure from office will burden balance sheets.
“It must be noted that whilst all other foreign currency assets and liabilities were translated at the rate of USD/ZWL1:7 at 30 June 2019, legacy debts of USD18 049 918 due to various line of credit providers, suppliers and service providers were translated at a rate of USD/ZWL1:1,” Benedict Chikwanha, chairman of NMB Bank said this week.
Under his reign, companies struggled with pricing controls while at one time, he approved the impounding of bank accounts of companies to fund the economy which had nose-dived under hyper-inflationary conditions in 2008.
Mugabe had brushes with SA companies such as Impala Platinum and Anglo Platinum, prompting them to agree to indegenisation deals while it was also under the late Zimbabwean leader, that Zimplats initially lost its mineral claims.