The millions of Zimbabweans living in South Africa are not busy packing their bags to return home. Enabling the opportunities to entice them back is a priority, says new President Emmerson Mnangagwa.
Turning around a ship-wrecked economy will take some time, which is better for SA, as any economy would feel the impact of millions of entrepreneurs across the whole of the income spectrum rapidly unplugging themselves.
Emmerson’s political history
While understood to be no-less vicious than former President Robert Mugabe - Emmerson, who became known as The Crocodile during the war of independence, was responsible for state security in the 1980s and so oversaw the Matabeleland massacres during which 20 000 people were killed.
In 2000 he supported the seizure of white-owned farms, and shortly after the national election of 2008 he was accused of orchestrating a deadly campaign of violence against opposition supporters. Around the same time he took control of the Marange diamond fields, from which, Mugabe estimated in 2016, about $13-billion of revenue had gone missing.
How to create "jobs, jobs, jobs"
Whether or not Emmerson is sincere in his drive to present Zimbabwe as open for business, analysts agree that to realise his focus on "jobs, jobs, jobs" declared in a speech recently, he will need to give action to his sentiment that, "Capital goes where it feels comfortable and warm, and if it’s cold it runs to a country which gives it better weather."
To make things markedly better in Zimbabwe, Emmerson will have to at least take the following steps:
- End sanctions: Trade embargoes did little to hurt those they were aimed at, and now is the time to remove them.
- Increase cash supply: Zimbabwe’s fragile economic stability of the last several years is under enormous threat due to the lack of cash in the system. Residents queue outside banks overnight for the chance to draw their $20 daily limit.
- Improve lending terms: The $9-billion-sized hole of unserviced international debt will need to be plugged. Reducing the amount for the first time in two decades will be difficult, and perhaps a unity government that includes the MDC will succeed in getting some of it wiped out.
- Create more formal sector jobs: An estimated 90% of the population is unemployed, and to attract the home-grown talent plying their trade abroad, SME job-engines are needed to absorb the huge demand for employment. The right market conditions will need to be created. This may mean the right to land is restored, especially for commercial farmers, and the Indigenisation and Economic Empowerment Act of 2009, which intended to dedicate 51% of companies to black Zimbabwean ownership, is repealed.
- Maintain optimism: Hope springs eternal from the human breast, and Zimbabwe’s new zeitgeist of enthusiasm is very powerful - as South Africans witnessed in 1994 and 2010. The joy from Mugabe’s resignation should be maintained in the national consciousness and turned to economic impetus through regular market-friendly statements and reforms.
- Be consistent and transparent in change: Zimbabwe’s economic base is very low, and many markets expect a very gradual turning of the ship. The change that is required is consistent and transparent, so that the market can price its risk accordingly.
- Focus on tipping-point sectors: Tourism and banking are vitally important for the domestic economy, and as the punitive taxes and costs of corruption are removed from it, the more the market will be able to respond unrestricted.
The country may need more than a pocket of change to fly right, but now, as it steps out from under Mugabe’s shadow, the world is starting to hear the jingle of opportunity. And often, that’s all that is needed.
Alan Cameron is an independent stakeholder management consultant working from Cape Town. Follow him on Twitter: @cameron_an.