In the last two days, the Zimbabwe stock market has crashed almost 10% as a ‘not-military-coup’ has ousted 93-year-old President Mugabe – the question is, what happens next?
Bloomberg reports that Zimbabwe President Robert Mugabe’s refusal to publicly resign is stalling plans by the military to swiftly install a transitional government after seizing power on Wednesday, two people familiar with the situation said.
That uncertainty is clearly showing up in Zimbabwe stocks…
The military wants Mugabe, who’s under house arrest, to agree to step aside so it can claim its action isn’t a coup and head off tension with the Southern African Development Community, which includes Zimbabwe and South Africa, the people said. The group previously intervened when the army took over in Lesotho.
However, as a reminder, Pedzisayi Ruhanya, the director of the Zimbabwe Democracy Institute, warns,
“Mugabe wants to die in office and is not interested in seeing his successor.”
“He is not a student of democratic processes.”
Bloomberg goes on to note that the new rulers, headed by armed forces commander Constantino Chiwenga, plan to try and negotiate the establishment of a transitional government with the opposition until elections can be held to restore stability, the people said.
But first they want a deal with Mugabe, whose 37-year rule left an economy that has halved in size since 2000, a severe cash shortage that’s choking businesses and a collapse in government services.
The military has declined to comment on its plans.
“The military, or the people who are now in charge, obviously they have some respect for Mugabe — he is someone who has led them for so many years,”Alex Magaisa, a Zimbabwean law lecturer who helped design the southern African nation’s 2013 constitution, said in a interview with Bloomberg Television in London.
“I think there is still some residual sympathy for him. They wouldn’t want to be seen to be mistreating him.”
The operation to take power had been planned for weeks but was accelerated after Mugabe fired his deputy Emmerson Mnangagwa, according to the people.
Many ordinary people simply hope that the authorities can improve daily life in Zimbabwe, where an estimated 95 percent of the workforce is jobless.The country doesn’t even have its own currency and relies mainly on the dollar.
“I hope and pray this takeover will bring lasting solutions for us,” said James Saunyama, as he collected his weekly allocation of $50 in coins from a bank in Harare.
“We’ve endured enough so this takeover must give us better and improved lifestyles going forward.”
The new rulers also want to repair relations with Western countries, who used to be among the biggest investors in the country, and international lenders, the people said.
They will seek investment from the more than 3 million people who left Zimbabwe because of the economic collapse including the white farmers driven off their land, the people said.
Mark Bohlund, Africa economist with Bloomberg Intelligence in London, expects Zimbabwe’s economic challenges to persist even if there is a power shift and the country adopts more orthodox economic policies.
“Expectations for quick progress toward receiving financial support and potential debt relief should be tempered,” Bohlund said.
“The huge challenges ahead and continued political uncertainty is likely to deter inward investment for many years to come.”
We leave it to Pedzisayi Ruhanya to sum things up…
“The chaos happening in Zimbabwe and ZANU-PF is what happens when the end of an authoritarian era approaches.”