Zimbabwe faces a watershed moment. General elections in July will be the first without Robert Mugabe at the helm of the ruling party. Political alliances have become increasingly factionalised, while voters appear undecided. Allan & Associates outlines the main political risks international investors should consider in the one-year outlook.
History in the making
On 30 July, Zimbabwe will hold the first general elections – including both presidential and legislative polls – in over three decades without the longstanding authoritarian president, Robert Mugabe, running. He was forced to resign amid a military intervention in November 2017. It will also be the first election in almost two decades without Morgan Tsvangirai, the opposition leader who died in February 2018. Zimbabwean voters face a much more open field than in the past three national polls. The vote takes place amid a deteriorating security environment. A grenade attack during a rally on 25 June on White City Stadium in Bulawayo, the second-largest city and opposition stronghold, killed at least two people and injured close to 50 more. Among the wounded were the two vice-presidents, Kembo Mohadi and Constantino Chiwenga. President Emmerson Mnangagwa escaped shaken but unharmed. Although no group claimed responsibility for the attack, the president accused the Generation 40 faction of the ruling Zimbabwe African National Union- Patriotic Front (Zanu-PF), which is loyal to his main rival for the party leadership, Grace Mugabe – Robert Mugabe’s wife.
An open playing field
The incident has raised the stakes for Mnangagwa, who is seeking popular assent after taking office following the military’s intervention. Zanu-PF remains the dominant political force in the country and will probably garner the most votes in the first round of the presidential election. However, a revamped and galvanised opposition is likely to lodge a serious challenge to the liberation movement-turned-political-party. This is mainly due to the large number of undecided voters – approximately 25 per cent according to several polls published in early June – who could sway the vote in one or the other direction over the next two months.
Who are the main contenders?
Mnangagwa, who successfully swayed the military to oust Mugabe when his political machinations upset Zanu-PF’s elites, is campaigning on a business-friendly promise of opening up the economy to foreign direct investment (FDI). This represents a break from the former administration’s policy of ‘indigenisation’ that has exposed foreign companies to enhanced compliance requirements and serious contract risks since it was launched in 2008. For instance, the Indigenisation and Economic Empowerment Bill required mining companies to have a minimum of 51 per cent of local ownership. Mnangagwa has promised to liberalise the mining sector by reducing the minimum ownership requirement in some sub-sectors of the mining industry, such as gold and nickel mining.
Mnangagwa’s debt to the army is likely to hamper his ability to pursue a comprehensive policy programme after the polls
However, the new president’s debt to the army is likely to hamper his ability to pursue a comprehensive policy programme after the polls. As U.S.-headquartered advocacy organisation Human Rights Watch highlighted in a May report, members of the security forces remain influential in the electoral process, with 15 per cent of the Zimbabwe Electoral Commission having links with the military. Mnangagwa has also increased salaries of civil servants by 15 per cent ahead of the elections, despite a poor fiscal outlook, in an attempt to ‘buy’ their political support. Moreover, although Mugabe is out of the presidential race, he remains an influential political figure, particularly within the three provinces of Mashonaland – Mashonaland Central, Mashonaland East, and Mashonaland North – a traditional Zanu-PF stronghold. Mnangagwa’s business-friendly approach is therefore likely to increase grievances among some ruling-party factions, as they are likely to mark a departure from Mugabe’s erratic policies and could be perceived by voters as not protecting the interests of regular Zimbabweans.
Up against the Zanu-PF is a rejuvenated Movement for Democratic Change-Tsvangirai (MDC-T) party, which leads the MDC Alliance of seven opposition parties under its 40-year-old leader, Nelson Chamisa. However, his leadership is being challenged at the High Court by his main opponent within the MDC-T, Thokozani Khupe, who claims she was the rightful winner of the party’s primary election in February. Furthermore, it is unclear what parties or what candidates will be included under the MDC Alliance’s banner, as the coalition is struggling to finalise its registration processes. Chamisa has promised to relaunch the ailing economy by introducing a new currency that is pegged to the South African rand. This would phase out the dollar-pegged bond notes that were introduced in November 2016 to bring a halt to endemic cash shortages and hyperinflation of one million per cent of the preceding years.
Political violence, a certainty
Although several candidates have condemned the grenade attack in Bulawayo, the risk of politically motivated violence remains high. MDC-T’s primary election saw a series of incidents of fighting between the party’s different factions, with a group of militants loyal to Chamisa, locally referred to as the Vanguards, assaulting supporters of Khupe. There have also been several violent incidents whereby Zanu-PF supporters have attempted to coerce voters to hand in their voter registration slips and commit to vote for the ruling party. Similar incidents, albeit isolated, are highly likely during the remainder of the election campaign.
Furthermore, Chamisa has warned against political intimidation by the military, which he says has deployed thousands of troops to rural areas, which are usually Zanu-PF strongholds. Chamisa contended that this prevents the opposition from campaigning in those areas. Recent events also suggest that Zanu-PF is likely to face a tough challenge. While the MDC-T in early June rallied about 4,000 supporters on the streets of the capital Harare to demand access to the new biometric voters’ register and details about the printing and storage of ballot papers, Zanu-PF has not been able to attract similar numbers of supporters. Its march in Harare a few days after the MDC event only attracted a few hundred supporters and quickly spiralled into a mass fight over the distribution of party T-shirts.
Although expectations for change are high among Zimbabweans, as well as the international community, July’s elections are unlikely to produce wide-ranging improvements to Zimbabwe’s business environment in the one-year outlook. The political transition since Mugabe’s ousting has been a patchwork of political deals…