HomeNewsKey political risks business must watch out for in Zim

Key political risks business must watch out for in Zim


Zimbabwe heads into a political storm in the new year with President Robert Mugabe pushing for an early election opposed by rivals and threatening to nationalise foreign firms in revenge for Western sanctions.

Political hardliners around Mugabe are also threatening rival Prime Minister Morgan Tsvangirai with treason charges over leaked secret briefings with US officials.

While Mugabe and Tsvangirai agreed last month to resume discussions to address rifts in their power-sharing government, no progress has been made as Mugabe’s Zanu PF party beats war drums for an election it wants by mid-2011.

Mugabe, forced into a unity government with Tsvangirai’s Movement for Democratic Change (MDC) after a disputed 2008 election, is not keen on extending the coalition and wants a referendum on a new constitution in early 2011 and a general election by June, two years ahead of schedule.

The MDC, which had suggested early elections to break deadlocks in the coalition, now says the climate is not conducive for a free and fair vote and is demanding political reforms before any polls.

So far, Mugabe has dismissed criticism that the early poll and his targeting of foreign firms pose a serious risk to Zimbabwe’s economic recovery and social stability.

Mugabe has warned Zanu PF will nationalise firms from countries that have imposed sanctions over his state’s suspected human rights abuses, arguing they cannot operate freely while Western powers punish his party.

The threat adds to worries of foreign investors in the resource-rich state, which introduced a law saying 51% of firms worth over $500 000 should be owned by black Zimbabweans.

Mugabe signed an Indigenisation and Economic Empowerment Act in 2008 and the government has issued regulations providing details of how foreign-owned companies should achieve at least 51% blacks within five years.

There are, however, sharp differences on the policy which his rivals say could hurt economic recovery.
What to watch:

How Mugabe reacts to any extension of travel, investment and financial sanctions against his associates at annual review meetings of the European Union in February.

Timelines and details of how the government plans to proceed with the empowerment programme in the different economic sectors, which would address investor fears.

Attorney-General Johannes Tomana has ordered a probe against Tsvangirai over State Department cables released by WikiLeaks about his briefings with US ambassador Charles Ray, which some of Mugabe’s officials see as “bordering on treason”.

According to another confidential US cable dated October 2009 on WikiLeaks, a senior MDC official suggested that the United States should contribute to a fund to buy off security service chiefs to achieve regime change in Zimbabwe.

The probe gives Mugabe’s camp options to pursue treason charges against MDC leadership, but political analysts say this could be part of a psychological war against Tsvangirai.

Attempts by backbenchers in Parliament across the political divide to resist an early election appear to have failed.

But Tsvangirai’s MDC and a smaller MDC faction, which is also in the unity government, still hope to lobby leaders in the Southern African Development Community (Sadc) to pressure Mugabe against early elections.

What to watch:

l MDC diplomatic campaign, and any reaction from influential regional leaders, especially South African President Jacob Zuma who is the region’s mediator in the Zimbabwe political crisis.

A Zanu PF annual conference held two weeks ago, which formally endorsed Mugabe as candidate for elections in 2011, passed resolutions threatening to expel foreign diplomats and to ban non-governmental organisations “meddling, and interfering in Zimbabwe’s internal political affairs”.

Analysts say while Tsvangirai and his lieutenants have legitimate complaints against Mugabe over outstanding reforms, there is growing frustration among his supporters that he is being outwitted by Mugabe, a cunning political veteran.

White farmers who have lost their properties under Mugabe’s land seizures over the last decade say Tsvangirai has lost his voice on their case, an issue the MDC fears Mugabe would use to portray him as a stooge.

A traditionally supportive private media has turned increasingly critical of Tsvangirai’s leadership, calling on him to exploit public goodwill in his fight against Mugabe.

Mugabe (86) and in power since independence from Britain in 1980, sees the MDC as a political puppet playing to a Western gallery. The MDC denies this and in turn dismisses Mugabe as a power-crazy dictator.
What to watch:

Any moves against foreign-funded civic organisations involved in election education and monitoring work.

Tsvangirai’s supporters walking out of some government functions and demonstrating against some of Mugabe’s officials, in media stunts which could invite police reaction.

Although a multi-party parliamentary committee leading a constitutional review process says it will respect the wishes of ordinary Zimbabweans, the final charter is a likely compromise between Zanu PF and the MDC who both lack a two-thirds majority in Parliament needed to pass the new supreme law on their own.

A referendum on a version in which there is no agreement between the two parties could lead to violence.

Tsvangirai says Mugabe has already used his traditional political shock troops, liberation war veterans, party youth brigades and security forces, to whip up support in the countryside, which has allowed Zanu PF to dominate public debate on the new constitution.

Zanu PF denies the charge and says Tsvangirai is already preparing an excuse for his party’s defeat.
What to watch:

Compromise deal. Many Zimbabweans hope that a new charter, replacing the pre-independence document, will strengthen the role of Parliament, curtail presidential powers and guarantee civil, political and media liberties.

The coalition has licensed several private newspapers after establishing a new media commission, but Tsvangirai has so far failed to push Mugabe to open up radio and television.

Mugabe’s officials say they are still looking at the issue, nearly two years after the power-sharing government was set up, and analysts say this will become more difficult as the country heads towards elections.

They have also resisted calls to repeal tough media laws barring foreign journalists.

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