Zimbabwe’s succession battle complicates growth push

Business
in
Harare
came
to
a
grinding
halt
on
31
March
after
Blessed
Geza,
a
former
ZANU-PF
central
committee
member,
called
for
nationwide
mass
protests
against
Mnangagwa.

The
call
by
Geza,
a
Chiwenga
ally,
shut
down
Zimbabwe’s
capital
Harare,
with
businesses
closed
and
streets
deserted
(pictured).

Hundreds
of
people
took
to
the
streets
and
barricaded
roads
while
singing
songs
against
the
2030
Agenda,
a
movement
plotting
to
extend
Mnangagwa’s
term
by
at
least
two
years.
Over
100
were
arrested
and
charged
with
participating
in
unsanctioned
demonstrations.

Zimbabwe
has
not
had
any
mass
protests
since
2019,
when
the
military
was
deployed
to
quell
demonstrators
who
took
to
the
streets
in
the
wake
of
150%
fuel
price
hikes.

Mnangagwa,
who
last
won
re-election
in
August
2023,
is
currently
serving
his
second
and
final
term,
which
is
due
to
end
in
2028.
The
president
has
denied
that
he
wishes
to
remove
term
limits
several
times.

A
former
commander
of
the
Zimbabwe
Defence
Forces,
Chiwenga
played
a
key
role
in
a
military
coup
that
toppled
longtime
ruler
Robert
Mugabe
in
November
2017,
which
propelled
Mnangagwa
to
power.

Chiwenga
supporter
Geza
appeared
in
the
media
last
month,
accusing
Mnangagwa
of
corruption
and
economic
mismanagement.

On
Wednesday
last
week,
Geza
said
he
was
pushing
to
impeach
Mnangagwa
based
on
ill
health,
which
is
highly
unlikely
given
that
the
president
controls
Parliament.

A
fragile
recovery

The
political
instability
could
knock
Zimbabwe’s
always
fragile
business
confidence.

The
World
Bank
anticipates
6%
economic
growth
in
2025,
driven
by
recovery
from
last
year’s
El
Niño
droughts,
increased
investments
in
mining
and
tourism,
and
improved
fiscal
stability.

Finance
minister
Mthuli
Ncube
has
expressed
confidence
that
the
country
will
achieve
the
growth
projections,
and
cites
efforts
in
agriculture,
mineral
beneficiation
–
particularly
platinum
group
metals
(PGMs)
and
lithium
–
as
well
as
tight
control
of
government
finances.

In
recent
months,
the
government
made
a
significant
step
towards
securing
future
financial
support
from
international
lenders
when
it
agreed
to
compensate
foreign
farmers
covered
by
bilateral
investment
treaties
whose
farms
were
seized
in
the
controversial
and
violent
land
reform
programme
of
the
early
2000s.

The
country
is
reportedly
looking
for
sponsors
to
help
clear
some
$21bn
in
historical
debt
arrears,
which
would
help
to
unlock
fresh
financial
support.

But
ordinary
Zimbabweans
continue
to
grapple
with
food
insecurity,
dilapidated
infrastructure,
and
average
consumer
price
inflation
that
the
IMF
projects
will
hit
23.6%
this
year.
Zimbabwe
replaced
its
ailing
local
currency
in
April
last
year
with
another
currency
dubbed
Zimbabwe
Gold
(ZiG),
backed
by
$550m
in
gold
and
foreign
reserves.
But
the
central
bank
devalued
the
new
currency
by
43%
in
September
2024.

Denford
Mutashu,
president
of
the
Confederation
of
Zimbabwe
Retailers
(CZR),
says
the
government’s
projection
of
6%
economic
growth
in
2025,
anchored
on
recovery
in
agriculture
and
mining,
is
cautiously
optimistic,
but
adds
that
structural
challenges
threaten
to
undermine
these
ambitions.

“Electricity
shortages
and
high
production
costs
persist,
as
evidenced
by
the
closure
of
some
businesses,”
he
says.

Choppies,
a
regional
supermarket
chain,
exited
Zimbabwe
in
January,
citing
a
harsh
economic
environment
dominated
by
informal
businesses
and
a
volatile
currency.
A
once-prosperous
clothing
retailer,
Truworths,
was
sold
for
a
nominal
fee
after
entering
a
corporate
rescue
process,
while
another
supermarket,
OK,
has
closed
several
branches
across
the
country
and
is
struggling
to
restock.

Farai Mutambanengwe,
chief
executive
officer
at
the
Small-to-Medium
Enterprises
Association
of
Zimbabwe,
says
economic
growth
projections
by
the
government
are
not
in
sync
with
reality.

“It
has
become
increasingly
difficult
to
assess
or
agree
with
the
gross
domestic
product
(GDP)
estimates
that
are
pronounced
by
the
Ministry
of
Finance,
as
they
are
tending
to
be
divergent
with
the
lived
reality
and
experience
on
the
ground.”

“We
have
now
had
several
years
where
GDP
numbers
indicate
growth,
yet
we
are
faced
with
a
collapsing
formal
sector,
increasing
informalisation
and
falling
domestic
demand,”
Mutambanengwe
says.

Could
metals
be
the
silver
bullet?

Against
this
difficult
backdrop,
Ncube
has
pointed
to
the
possibility
of
developing
a
lucrative
metals
industry
based
on
the
country’s
lithium
and
PGM
resources.

Mutashu
agrees
that
over-reliance
on
raw
mineral
exports
without
value
addition
has
left
the
economy
vulnerable
to
commodity
price
volatility.
Last
year,
major
falls
in
platinum
prices
forced
companies
to
retrench
workers
and
close
some
mines.

“Mining
sector
growth
should
prioritise
local
beneficiation
to
retain
value
and
jobs
domestically,”
he
says.

The
government
moved
to
ban
exports
of
unprocessed
raw
lithium
in
2022,
although
illegal
smuggling
persists.

Some
lithium
companies,
including
Chinese-owned 
Zhejiang
Huayou
Cobalt,
Sinomine
Resource
Group
and
Chengxin
Lithium
Group,
have
invested
in
constructing
lithium
processing
plants.

Yet
the
country’s
intermittent
power
supply
is
another
challenge
that
must
be
overcome
if
a
local
metals
industry
is
to
become
a
serious
contributor
to
growth.
In
2023,
China’s
ambassador
to
Zimbabwe,
Zhou
Ding,
said
that
power
shortages
and
high
energy
prices
are
a
major
block
to
the
manufacture
of
battery-grade
lithium.

Fundamental
change
required

With
so
many
challenges
facing
the
economy,
the
uncertainty
over
the
political
succession
is
unlikely
to
be
welcomed
by
investors.
Yet
without
further
impetus
towards
political
reform,
the
country
is
also
unlikely
to
see
major
progress
on
remedying
its
longstanding
difficulties.

Lyle
Begbie,
an
economist
at
Oxford
Economics
Africa,
says
that
Zimbabwe
faces
several
institutional
challenges
that
hinder
the
widespread
distribution
of
economic
benefits.

“Without
fundamental
political
changes,
sustained
economic
growth
outside
of
the
extractive
sector
remains
unlikely,”
he
says.

Source:


Zimbabwe’s
succession
battle
complicates
growth
push