Zanu-PF infighting spells more doom for Zimbabwe's economy

ZANU-PF's internal fights, as party members jostle for strategic positions ahead of its December elective congress, have devastating consequences for Zimbabwe's economy which has shrunk significantly over the past 14 years, resulting in widespread poverty and an employment rate of over 80%.

While Zanu-PF leaders are locked in power struggles to succeed 90-year-old President Robert Mugabe, the economy is sinking further into the doldrums.

The economy floundered last year as investment failed to trickle in while relations with Europe and the US remained tetchy.

The continued economic decline, characterised by severe liquidity crunch, downsizings and company closures, has spawned massive retrenchments which is threatening both the formal sector and government's tax base.

Fierce divisions have rocked ruling party Zanu-PF and are probably at their worst since Independence. This was clearly demonstrated during the party's Youth and Women's League conferences held in the capital in the past two weeks.

The events were characterised by allegations of kidnapping, intimidation, open vote-buying and virulent attacks between the two factions believed to be led by Vice-President Joice Mujuru and Justice minister Emmerson Mnangagwa, although both have strenuously denied this.

The strife in the party was illustrated by President Robert Mugabe apologising last week for the embarrassing conduct by some of the party's politburo members calling their attitude "dirty" and "rubbish".

It was further exemplified by Foreign Affairs deputy minister Chris Mutsvangwa's vicious attack on the party's secretary of administration, Didymus Mutasa, in a local daily over the weekend.

However, amid all this fierce Zanu-PF factional fighting which could make a sumptuous script for a soap opera, the biggest victim is the economy.

A report on the state of the party tabled at the just-ended Zanu-PF national Women's League conference noted that the party's elections were divisive and it was time the revolutionary party moved on with projects aimed at rebuilding the party and the country.

As Zanu-PF tears into itself, the liquidity crunch continues its stranglehold on the economy.

A recent Confederation of Zimbabwe Industries (CZI) report shows the economy continues to suffer as government fails to contain the collapse.

"The year to date growth on prior period statistics shows poor performing government revenue, reduced VAT collections, depressed imports and exports and an increase in the fuel bill," reads the report.

The business grouping also revealed recently that a total of 10 major economically strategic companies have shut down in the eastern region over the past five years, while five are operating below capacity.

Economist John Robertson said the economy will continue on its downward spiral as it plays second fiddle to the ruling party's internal sparring.

"The economy is in urgent need of attention," Robertson said adding that: "But they (Zanu-PF) are totally pre-occupied with party affairs. National affairs have become of no consequence."

He said the fight by individuals for lofty positions in the ruling party could see the country's economy recording a negative growth rate of -1 to 2%.

This is a far cry from the 6% growth rate Finance minister Patrick Chinamasa initially projected when he presented the 2014 national budget in December last year.

Robertson said the squabbles in the party will further discourage investors.

"Investor-confidence is important and this (Zanu-PF infighting) will damage it." Robertson said. "The government needs to refocus their attention on the economy."

As knives are sharpened within Zanu-PF ahead of its congress, the number of job losses continue to increase. Insiders within the Retrenchment Board revealed that 4 668 workers have been laid off since the beginning of the year with the possibly of 1 000 more lay-offs by the end of next month. An average of 10 companies are closing every month, escalating unemployment.

This has seriously shrunk government's tax base, which partly explains why it is struggling to pay its 236 000 workers as demonstrated by the continued shift of their pay dates.

The in-fighting comes at a time government is struggling to get funding for its economic blueprint, the Zimbabwe Agenda for Sustainable Socio Economic Transformation (ZimAsset). The blueprint requires a total of US$27 billion.

Economist Godfrey Kanyenze describes the current situation as "catastrophic".

He said the country continues to be in election mode, more than a year after the country held its general elections, derailing government's focus on breathing life into an ailing economy.
Kanyenze has warned that as Zanu-PF approached the 2018 elections, the sparring is likely to worsen.

"As we approach D-day, the decibels are going to go higher and higher," he said.

Kanyenze said it was ironic that the party which celebrated the demise of the inclusive government citing the conflicts among the three parties, was still embroiled in squabbles after getting a fresh mandate as the ruling party.

He said the internal conflicts in Zanu-PF will send a message to the country's investors that there is no harmony or cohesion within the country, worsened by the continued policy inconsistency by government.

Kanyenze added it will also be detrimental to the country's re-engagement process with international financial institutions such as the International Monetary Fund.

He said the re-engagement process required a serious partner on the other side of the table and government could not afford to come across as a confused partner in the process.

Party politics aside, he said, the Zanu-PF government needs to start focusing on policies that revive the economy.