Beating the Odds

 

Harare – It is not something that much of the mainstream media and its owners would like to admit, but all the evidence on the ground shows that Zimbabwe’s President Robert Mugabe is right.

In the July 31, 2013 poll, an overwhelming majority gave him the mandate to form a government for the next five years.
And these millions of people have been won over by his pro-empowerment policies.
It is these policies – captured broadly in the Fast-Track Land Reform Programme and the Economic Empowerment and Indigenisation drive – that have resulted in much vilification of President Mugabe.
These same policies are the reason why 2 110 434 Zimbabweans voted for President Mugabe against the 1 172 349 won by his main challenger, Morgan Tsvangirai.
These policies have been called disastrous and corruption-riddled by President Mugabe’s opponents.
But there is an object lesson for the whole of Africa in what President Mugabe has done: that empowerment is the way forward for the continent.
 
 
Viable Land Reform
 
Evidence on the ground shows that President Mugabe’s policies are not only popular (as seen by the election outcome), but they are also economically viable alternatives to IMF, World Bank and other donor-generated models that have not resulted in any meaningful development in Africa.
On the land question, there is much that countries like South Africa, Namibia and Kenya can learn from Zimbabwe’s experience.
In a study titled “Zimbabwe Takes Back Its Land”, three solid researchers conclude that land reforms have changed the lives of millions of ordinary people.
Joseph Hanlon (Senior Fellow, London School of Economics), Jeanette Manjengwa (Deputy Director, LSE) and Teresa Smart (Visiting Fellow, London University), contend that breaking up the massive white-held landholdings and giving them to hundreds of thousands of black farmers has actually helped spread wealth.
The first myth that these scholars destroy is that “Mugabe’s cronies” are the primary beneficiaries of land reform.
Government and ZANU-PF officials own less than 10 percent of the land. In all, some 250 000 black Zimbabwean families now own land once held by just 6 000 white farmers.
“These are primarily ordinary poor people who have become productive farmers. The change was inevitably disruptive at first but production is increasing rapidly.
“Agricultural production is now returning to the 1990s levels, and resettled farmers already grow 40 percent of the country’s tobacco and 49 percent of its maize,” the researchers say.
This flies in the face of claims that the new farmers are not productive. In fact, point out the researchers, many of the smaller farmers are getting profits of around R90 000 a year while the bigger ones are raking in above R1 million annually from their farms.
They add that more land is now under active production than when white farmers ran commercial farming. Only 66 percent of available arable farmland was actually being cultivated by white farmers.
Despite the generous incentives and subsidies the government gave white farmers, by the time fast-track land reforms started around 30 percent of them were insolvent and another 30 percent were only just breaking even.
Only about 300 white farmers were classified as running highly profitable operations!
Those who say these gains have come at the expense of the livelihood of farm workers must also pause and think again. The number of farm workers increased more than five-fold, from 167 000 in 2000 to over a million in 2011.
Professorial Fellow at the Institute for Development Studies at Sussex University in the UK, Ian Scoones, did his own study that declared Zimbabwe’s land reforms a success.
“There has been a lot of distortion and misleading facts. Debates have stuck in emotional and ideological positions around land,” he noted.
Prof Scoones said small grain production went up by 163 percent, edible dry bean production by a whopping 282 percent and cotton by 13 percent between 2000 and 2010.
“The agricultural sector has been transformed and there are problems but it has certainly not collapsed… Yes, there have been problems. We would not deny that has been part of the story, but it’s not the whole story.
“We have to appreciate both the successes and failures and not to take a misleadingly one-sided perspective on it all. Sometimes this is reported in very respectable newspapers in the UK, South Africa and Zimbabwe, but this is simply not supported by facts on the ground.
“Sure, there are elites who have benefited, but, overall and certainly from our study, we found that about two-thirds of the beneficiaries were mostly poor people from rural areas.”
Prof Scoones’ contention is that it takes a generation for land reforms of this magnitude to produce real results but in his estimation, Zimbabwe’s new farmers are on track to produce better than their white predecessors in a much shorter time frame.
 
 
Resource Nationalism
 
After the land revolution, President Mugabe set his sights on democratisation of the economy.
With indigenisation, no less than 51 percent of any enterprise valuated at more than US$500 000 should be owned by indigenous Zimbabweans.
In the view of Garikai Chengu, a Fellow of Harvard University's Du Bois Institute for African Research, Zimbabwe has set in motion processes that will ultimately benefit the entire continent.
“A bloodless revolution is silently taking place in Zimbabwe. President Mugabe’s indigenisation of the land and the economy will set a precedent for the creation of a fore-running, economic model for Africa. Consequently, the (election) victory that has been recorded for President Mugabe is a resounding victory for the future of the African continent…
“At President Mugabe’s last campaign rally, he proclaimed that ‘we must re-write the economic books for our children. Those books were written to suite the West’s agenda of exploiting our resources. 
'Our children must know that our resources are more significant, more precious than their capital’.
“Years from now, economic books will use Zimbabwe’s indigenisation programme as a model for African decolonisation. African politicians will look to Zimbabwe as a point of reference.
“As with tobacco, diamonds, cocoa and oil, Africa exports its precious resources to the West, only to buy them back at a premium. This is Africa’s greatest problem and biggest opportunity.
“The solution to this problem is simple: Africa must not only control its raw materials but also build the capacity to make them into finished products.
“Indigenisation is the much-needed bridge between poverty and industrialisation, and therefore, transforming Africa into a First World power.”
Chengu says Africa is not under-developed, but rather that it is over-exploited and it is for this reason that resource nationalism is a must.
World Bank estimates indicate 65 percent of Africa’s best arable land is controlled by foreigners, and 70 percent of the continent’s net wealth is in non-African hands.
Dr Muneri Muguyo says in the midst of such statistics, Zimbabwe is “an oasis of indigenisation in Africa and there is no doubt that it has become inevitable for all African countries to follow Zimbabwe’s footsteps on total independence”.
He goes on: “It might not be today, tomorrow or next year but the seed sown by President Mugabe will germinate, grow and bear sumptuous fruits that so many other countries will be forced by future generations of their population to do exactly the same.
“Land reform and indigenisation is now inevitable in all African countries after Zimbabwe’s example.
“The model might differ, the timing might differ but it has to be done and it will be done. 
“Zimbabwe will be the point of reference…
“The rest of Africa must learn from the Zimbabwean scenario where foreigners must cede 51 percent shares to indigenous people, otherwise the Chinese will wipe out everything and leave Africans still poor. At the end, whether it is China or Europe, Africa’s natural resources would be gone for a song…
“Zimbabwe is at the moment an oasis of indigenisation but there is no doubt that it has become inevitable for all African countries to follow Zimbabwe’s footsteps, today, tomorrow or next year. Only time will tell.”
 
 
Following Suit
 
Some countries have already started down the path of empowering their citizens by giving them greater say in how their resources are managed.
Ernest & Young analysts said in 2012 that the resource nationalism trend is not likely to slow down and this is evident across Africa, Indonesia, Australia and Latin America.
Analysts have said the drivers of resource nationalism – such as revenue maximisation, supply chain development, and revision of historical contracts – are as clear as the motives that compel private miners themselves: profit and shareholder dividends.
In this case, it is about getting more profits and dividends for Africa and Africans.
“The only way to safeguard projects against the demands of more assertive governments is therefore to engage pro-actively in the resource nationalism debate.
“In this way we believe that despite investor concerns, the resource nationalism trend provides an opportunity for the mining sector to improve the long-term security of their mining projects, whilst playing a constructive and profitable role in African development,” mining analysts at London-based advisory firm africapractice said.
And after the example of Zimbabwe, which was attacked for over a decade and is now emerging stronger, African governments should be feeling confident enough to assert their power over their resources.
In 2011, Namibia declared all minerals – except zinc and fluorspar – “strategic” and handed over all exploration rights to a newly-created state mining arm called Epangelo Mining Limited.
Foreign investors must partner with Epangelo if they want to exploit any strategic mineral in Namibia.
Other mineral-rich countries like Guinea, the DRC and Zambia are pushing through wide-ranging policy reforms related to this trend.
The DRC, which holds some of the world’s largest deposits of copper and cobalt, is amending its mining code to enable the state to hold no less than 35 percent equity in mining projects.
“We need to put an end to the paradox which sees huge mining potential, and ever more intense mining activity, but only modest benefits for the state,” DRC President Joseph Kabila said recently.
Guinea, believed to hold the world’s largest deposits of bauxite and iron ore, has a law that gives the state 35 percent equity in mining projects.
The country is also reviewing all mining contracts with a view to raising state participation and boosting mining revenues.
Zambia wants no less than 35 percent of all mining projects and reforms to the extractive industries sector are underway.
 
 
The Jewel in the Crown
 
But much of what is happening could be futile if the DRC and South Africa, do not democratise their economies.
According to Harvard Fellow Chengu “the West's biggest prize on the continent, (is) South Africa, where only nine percent of the population is white and yet it enjoys 80 percent of the country's wealth”.
There has been growing talk of economic nationalisation in that country and the matter of resource control in mining and agriculture is one that the government there is going to have to deal with sooner or later.
South Africa had a nasty spat with global resources giant Anglo American Plc recently and Mineral Resources Minister Susan Shabangu told international mining capital to respond to the changing environment.
The DRC’s known mineral and metals wealth is estimated to be worth US$24 trillion.
Endless conflicts in that country are a symptom of undemocratic economic management and it is matter of time before authorities there confront head-on this poverty-creating mess just as Zimbabwe was forced to confront the land issue when people started moving onto farms on their own.
It is not going to be easy, as capital will fight any country that decides to do what Zimbabwe did.
Since World War II, the US has involved itself with overthrowing 52 other leaders, some of them democratically elected and in just about all the cases, Washington’s gripe was resource nationalism.
Chengu says, “The reason for US pressure on these leaders is simple: the biggest threat to America's capitalist imperialist economic model is lack of access to foreign markets.”
But with perseverance and the right strategies – or as Dr Muneri Muguyo says “wit, calculative political manoeuvres and principled stance” – the battle can be won.
Dr Muguyo says, “In Zimbabwe, the US and its allies in (the) EU are being forced to swallow their pride and have already shown movement towards normalising relations with President Mugabe.”
There is light at the end of the tunnel.
 
 

August 2013
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