The Telecel saga - The problem of primitive accumulation in Zimbabwe

Two stories in the last few days encapsulate the problem with the Zimbabwe Government's mismanagement of the economy and why, with this style of economic governance, the country cannot hope to get out of the current lurch or to progress as other countries are doing.

A Government manned by greedy, dishonest individuals who are motivated by a penchant for primitive accumulation and misusing the cover of the law to advance selfish goals cannot succeed in delivering the public good.

What is more disheartening is that some of those engaging in this behaviour are relatively young politicians who might have been expected to demonstrate a fairer and more progressive vision than their older counterparts whose vision and conduct of politics are understandably directed and influenced by their proximity to the sunset.

One story concerns commercial agricultural land and the second concerns a battle for ownership of a mobile phone services company, Telecel.

Chimene Grabs Mutasa Farm
The first is a story carried by The Herald on Monday 4th May 2015, headlined, "Chimene takes Mutasa farm". It was a kind and charitable headline. It could have been "Chimene grabs Mutasa farm" or "Chimene forcibly evicts Mutasa". Or worse. Because that is precisely what has happened.

Chimene is the Minister of State in charge of Manicaland Province. She was appointed earlier this year, during the purge of a faction of the ruling Zanu-PF, which favoured ousted Vice President Joice Mujuru.

Didymus Mutasa, a former senior government minister and chief of administration of the ruling party, was Mujuru's biggest backer. He lost his portfolios and was recently fired from Zanu-PF and also lost his parliamentary seat. He is now an ordinary citizen, without political power.

Chimene, who is new to ministerial power, is now enjoying the political authority that she never had and has been on the attack against Mutasa ever since she assumed her new role. She is probably revenging for whatever she and her allies might have suffered during Mutasa's long reign as the big political boss in Manicaland.

The latest is this incident in which Chimene, often referred to by her exotic-sounding shorter name, Mandy, but whom we now know was named Mandiitawepi at birth, has imposed herself on a farm that is reportedly owned by Mutasa, allegedly through a proxy. Ironically, Mutasa or whoever was on the farm, would also have acquired it a few years ago by use of force, from its previous white owners. That annexation of the farm would have been purely because he held political power at the time.

But now, because he has lost political power, he has also lost the farm or to put it differently, because Chimene has gained more political power, she has grabbed it from him. It's a dog-eat-dog situation. It's chaotic and one might say, a primitive-style 'survival of the fittest' scenario, in which he/she who has power wins. No you don't even have to go to court. You just occupy because you have political power. There is no rule of law. It's rule by force of political power. It's like a Hobbesian state where life is "nasty brutish and short".

The irony is lost on Chimene and her allies that if and when they do lose power, whoever comes in will do exactly the same to them. How can a country be expected to work in such a scenario, where property rights mean nothing? How can anyone sensible invest long-term in an agricultural enterprise when someone with greater political power can wake up one day and decide that they want what you have?

The problem, of course, did not start with Chimene. She is only following a path well-travelled. Mutasa himself and others used force and paid no regard to the notion-PF property rights. And when they had settled, they still did not recognise that farming is a business, which requires security of property rights and that like any business, it cannot work well without secure protection of property rights. He and others like him are learning this bitter lesson.

I suppose most will say Mutasa deserves what he is getting and that might be correct by the laws of Karma. But it does not excuse the primitive style adopted by Chimene. All it creates is a never-ending cycle of chaos, disorder and primitive accumulation by the elite, which is at the heart of the economy's downfall.

President Mugabe and Zanu-PF are fond of blaming sanctions for Zimbabwe's economic collapse, but what they do not grasp is the fact that they are continuously imposing sanctions upon Zimbabwe through daft, ill-advised and primitive behaviour motivated by self-interest, greed, revenge and sheer cruelty.

Battle for Telecel
The second story is that of Telecel Zimbabwe, the mobile telephone services provider. Last week, I devoted an article to Telecel and compared its fortunes to those of its major rival, Econet (see).

In that article, I made the point that political patronage is a heavy albatross upon business. Econet had thrived, free of political patronage, while Telecel had struggled and been complacent under both the weight and privilege of patronage. However, it is now also clear that the Government of Zimbabwe has been less than honest to the nation when it gave its reasons for cancelling Telecel's licence.

For months, Government, through the ICT Ministry told us that Telecel's licence was under threat because the company had failed to pay its licence fee and that it had failed to meet the terms of payment that had been agreed with Government. The other reason was that Telecel had failed to comply with the indigenisation rules, which require that companies must cede 51% of their shareholding to indigenous players. Emphasis was placed on the failure to pay licence fees, as if that was the major problem.

But it now turns out that the bit about the non-payment of the licence fee was less than honest. It was government that agreed terms of payment with Telecel, for whatever reason and Telecel has been making these payments and where delayed, this has been with government's knowledge and condonation. They could not turn now to say Telecel has not paid its licence fee.

To my mind, failure to pay the licence fee would have been an understandable reason on which to base cancellation of the licence. But now it turns out this is not, in fact, the case. This probably why the issue of the non-payment of the licence fee has been dropped from the Government's reasoning for cancelling the licence because they know it was not true. It has become apparent that the major reason for the cancellation is based on the so-called non-compliance with indigenisation rules.

But there was no need for Government to use half-truths to justify their decision to cancel the licence.

Now we know the reason is really about indigenisation rules, although this too is merely a cover for the pursuance of self-interest. One consequence is that this will place many other foreign companies in Zimbabwe (and potential investors) on high alert, including international banks, insurance companies and others because this is about the enforcement of indigenisation rules. It means banking licences can be cancelled by the Government on the basis of non-compliance with indigenisation rules.

And one has to wonder if this is the kind of message that the Government wants to send out to investors at a time when it is desperate to attract investment and to resuscitate a failing economy?

The truth, as assessed in last week's article, is that this is a new tactic for powerful individuals wanting a stake in Telecel and other potentially lucrative companies, to grab shareholding in those companies, using governmental power as a bargaining tool. No, they will not allow Telecel to collapse. That is not their intention. They know it is costly for Zanu-PF. So closing down the business was never part of their intention. All they want is to push the shareholders into a corner until they feel the pressure so much that they will have no option but to sell and sell at a lower price than they would otherwise have done.

Telecel still has a chance to survive, says Supa Mandiwanzira, the ICT Minister, already giving hints of what we already knew all along. All they must do, he says, is to sell the majority stake to local investors and they can keep the licence. But Telecel say they made an offer of 11% shareholding to their workers, which, combined with the 40% already owned by a consortium of local investors would meet the 51% indigenisation quota. They say this offer was rejected by the Government. Why then would the government reject this offer, which would meet the indigenisation requirements? Is it because when the Minister speaks of selling the majority shareholding to local investors, Government has specific local investors in mind? If so, who are they?

If it is true that Telecel made this offer to sell a stake to employees and that the Government has rejected it, then it lends further credence to the theory that there are some big fish in or around Government who are trying to use governmental power to muscle in on Telecel.

If, on the other hand, Telecel is lying about the offer to employees, then Government must say so. If Government rejected the offer, it would suggest that what is happening to Telecel has nothing to do with indigenisation, but that there are other ulterior motives for cancelling Telecel's licence.

As we said in last week's article, a persuasive theory is that some of Telecel's shareholders are considered too close to the political faction led by ousted Vice President Joice Mujuru. Now that they have lost political power they have become vulnerable to the whims of the winning faction, or some elements of it. Political power is drawn from various sources and one of them is economic. If Telecel is regarded as representing economic power of the Mujuru faction, one aim is to annihilate them economically and to do so by removing one of their sources of economic power. Ultimately, it means this is politics being played under the cover of the law and governmental authority.

Like the Chimene-Mutasa farm saga, the Telecel saga is yet another demonstration of what goes wrong when politics of retribution take precedence over economic wisdom. These people will find legitimate grounds upon which to base their conduct, but this is all a big veil to conceal their selfish desires. The loser at the end of the day is Zimbabwe.

Investors do not throw their money into zones of insecurity, unfairness and instability. Chimene decided to impose herself on a commercial farm, with no regard whatsoever to property rights, just as those she is now displacing had done before her. Some big people are also trying to impose themselves upon Telecel, abusing the cover of governmental authority in the process. None of this can be to Zimbabwe's benefit. The biggest sanctions on Zimbabwe are those imposed by its present rulers and not by outsiders.

wamagaisa@yahoo.co.uk