BELOW is a book excerpt from: In search of the elusive Zimbabwean dream, Volume III Ideas and solutions...
One depressing discovery I make while in the government of national unity (GNU) is that contrary to the emphasis on 99-year leases, most Zanu PF political elites understand the value of title deeds.
Not only that, but they also hold title deeds to the farms they have! How did they do it? It is a revealing story — ingenious if it was not criminal.
During the Gideon Gono years of hyperinflation, they made serious cash by ‘burning’ money. The parallel market for foreign currency enabled serious self-enrichment through arbitrage by individuals or institutions who have access to the Reserve Bank of Zimbabwe (RBZ) or are politically connected.
They made tonnes of US dollars by moving between the parallel market and the RBZ. For example, starting with US$10 000, you could easily convert it into US$1 million without any production.
Is that believable? Here is the illustration: Assume the official rate (US$ to ZW$) is 1:20, and the parallel one is 1:200. You take the US$10 000 and buy ZW$ at the parallel rate and obtain ZW$2 000 000.
Next, use this local currency to buy – through your connections at RBZ or your links with the political establishment — the rare US dollars at the official rate and produce US$100 000.
After that, you go back to the parallel market and buy more local currency. This gives you ZW$20 000 000. You then return to the RBZ, buy US dollars at the official rate, and obtain US$1 000 000.
- Teachers, other civil servants face off
- Corruption Watch: Get scared, 2023 is coming
- Is Zanu PF ready for elections or its just a masquerade?
- Corruption Watch: Get scared, 2023 is coming
Hence, going through these two cycles, one can convert US$10 000 into a million US dollars without any production or economic activity.
This is criminal! You can repeat the process a few more times, and the US$10 000 will compound into an unimaginably staggering amount in real money terms, that is, in US dollars.
That is how the political elites made tonnes of illicit money in Zimbabwe.
In July 2022, the dual exchange rate — a financial bonanza for the elites — is back in Zimbabwe.
This time it is the auction (official) rate coexisting with the parallel (black) market rate, for example, an auction rate of 1:375 versus a parallel market rate of 1:800.
As I conclude these memoirs in January 2023, the auction rate is US$1:ZW$705 and the parallel market rate is US$1:ZW$1 200. Once again, the elites with access to the auction rate are making a killing using arbitrage as discussed in the preceding section.
It is not surprising that the Mnangagwa regime is resisting full dollarisation. Why eliminate an efficient looting mechanism of a dual exchange rate?
Anyway, that is all in the future. Let us continue to explain the financial scandal of the land reform programme, an otherwise noble land redistribution effort, which was ignited in 2000.
With the massive ill-gotten real cash from exchange rate arbitrage, the political elites would invade a farm and chase away the owner. After taking over the farm, they would pursue and approach the displaced farmer holding on to his or her title deeds.
The farmer might now be squatting in the city of Harare, neighbouring South Africa, the United Kingdom, Australia or New Zealand. The displaced and disillusioned poor soul is accosted: “How much are the land, assets, crops and all improvements on your farm worth?”
The pleasantly surprised farmer ventures an assessment: “It is worth US$5 million”. The corrupt Zanu PF elite then harangues and berates the farmer: “You must be joking. Who is going to give you that kind of money? We only talk of compensation for improvements that we will never pay anyway. It is all propaganda. Your lot is finished! Anyway, here is US$2 million. Take it or leave it.”
The desperate farmer, living in squalid conditions with a bleak future, does not have too many options. They are probably overjoyed. The farmer grabs the US$2 million and hands over the title deeds to his farm.
Naturally, such farmers who are unwitting beneficiaries of Zanu PF corruption will not widely share their narratives. So, there you are. This is how most of these Zanu PF elites got title deeds to their farms.
The 99-year leases are for the middle-layer of insignificant beneficiaries of the land reform programme, such as war vets, low-ranking army officials, business folk, and ordinary and unimportant folks.
The top elites have title deeds. I am shocked and perplexed. In fact, in my conversations with Robert Mugabe, he tacitly acknowledges the strategy of the Zanu PF elites.
Mugabe says: “Future generations will challenge this land reform programme of ours. The 99-year leases will be cancelled.
“They will say: ‘We were not there when state land was distributed. How can one generation parcel out finite resources such as state land to itself? Did they not think about future generations? Now that none of us was alive when the land was shared, we will legally nullify the whole thing!’
“That will be the conversation among future generations, Prof Mutambara. Moreover, who knows what will happen if another political party comes to power, or a different type of leadership takes over Zanu PF”.
These are the astonishingly wise and revealing words from Bona’s son – the champion of the land reform programme and its 99-year leases.
So how do you insulate yourself from that uncertain future ruled by the unborn generations? Of course, you obtain a title deed! Surely, those ungrateful and inquisitive future generations cannot touch a title deed.
Moreover, if any new dispensation tries to address the violations of the land reform programme, they cannot assail someone holding title deeds.
The rule of law will protect such an individual. You either believe in the legal instrument called a title deed, or you don’t.
The rule of law demands that title deeds — for vehicles, houses and land — be respected. Any government can easily cancel those 99-year leases. However, title deeds are safe. So, the Zanu PF elites are covered on all bases.
At least, that is their criminally inspired hope. The quasi-genius and ingenuity of Zanu PF corruption and profligacy never cease to amaze me.
If only they could apply the same dogged determination, dexterity and innovativeness to pursue a peaceful, democratic and prosperous nation, Zimbabwe would be a different place — a little paradise on earth, indeed!
On one occasion, I have an appointment with Mugabe to explain and demonstrate some nation-building concepts. I propose to make a PowerPoint presentation, and he suggests that I bring my equipment to his State House offices.
On the day of the meeting, when I try to get into his offices, the security details manning the premises block me. They insist that I cannot get in with my technology. I am puzzled: ‘But the President is expecting me,’ I remonstrate with them. They do not relent.
I try to call Mugabe’s secretary Lawrence Kamwi who is in the building. He does not cooperate. I decide to bull-doze through the barricade, literally manhandling the cowardly but armed security details, and march up the stairs to Mugabe’s office.
Who do I find in the office’s reception area? Lawrence Kamwi is at his desk, and defence minister Emmerson Mnangagwa is sitting in a chair in the corner, covering his face with a newspaper.
Visibly angry, I burst out: ‘What is going on?’ The two men do not respond or look me in the eye. It seems they have orchestrated the blockade against me. But why?
I do not understand the state of play. Eventually, Mnangagwa leaves, and I am called into Mugabe’s main office, and I carry out my presentation.
When I relate to him, the security blockade and the two men’s weird behaviour, he laughs and says: ‘Oh, those two are just overzealous and insecure sycophants. They fear your growing influence and impact.’
I am perplexed. Indeed, Emmerson has always been a schemer, with his eye firmly on being the closest to Mugabe while shutting out rivals or using false intelligence reports against them. Shameful, indeed.
In one bilateral meeting with Mugabe, he jokingly says to me: ‘Ah, I hear you have your lunch paMereki (a popular but low-end eating place in the industrial area).’
I am shocked. Although I know of this joint and have nothing against it, I have never been there. Not even on one occasion.
I blurt out: ‘Who told you that!’ Mugabe just sheepishly smiles and slyly says: ‘Of course, I have my sources.’ I am further puzzled and astonished.
However, I realise there is a more significant institutional issue at hand and proceed to say: “Mr President, to me, this is a harmless lie. Why? I have no problems with having lunch paMereki.
“However, I have never been there. Nevertheless, my concern is that if these CIO folks lie to you about trivial matters such as where I go for lunch, what other falsehoods are they feeding you on substantive issues — not just about me, but concerning other GNU colleagues, including those from your own party?
“Are the intelligence services not feeding you false and manipulative information about important events and developments?”
Mugabe just chuckles and dismissively changes the subject. As events will pan out in the future — the political demise of Joice Mujuru and the Gamatox faction in 2014, the elevation of Emmerson Mnangagwa as Vice-President in the same year, and the 2017 coup d’état that topples Mugabe paving the way for Mnangagwa’s ultimate ascendency — are all enabled by falsified military intelligence.
Indeed, Mugabe’s voracious appetite for gossip and overdependence on intelligence reports constitute his Achille’s heel, as his long-term subordinates familiar with his disposition exploit it to devastating impact and effect. Of course, the key drivers behind the manufacture of the false military intelligence are none other than Emmerson Mnangagwa and Dominic Chiwenga, the ultimate beneficiaries of all these shenanigans.
Well, during the GNU, their triumph is still in the future. However, they are at work feverishly and relentlessly.
- Mutambara is former deputy prime minister of Zimbabwe and an independent technology and strategy consultant based in South Africa.