HARARE, December 21 (The Source) – The year 2016 has been one of the toughest in Zimbabwe’s seemingly unending crisis — a serious drought, cash shortages, job losses. Because our grim reality is depressing, we put on our rose-tinted glasses and attempt a wilfully blithe forecast of what 2017 could bring.
President Robert Mugabe trims Cabinet
On his return from his annual vacation in the Far East, President Robert Mugabe announces that he will reduce the size of his Cabinet. Like the $300bn GDP Singapore, which the president has grown familiar with, $14bn GDP Zimbabwe will now have a 20-member Cabinet, down from the current 30 ministers. Ministers of State, including 10 provincial ministers, as well as deputy ministers are also dropped.
Trump walks back tax cuts and infrastructure spending
Calling himself ‘the greatest negotiator ever,’ US President Donald Trump uses his Inaugural Address on January 20 to walk back some key campaign promises — arresting Hillary Clinton, building the wall, and, more importantly for the markets, tax cuts and aggressive infrastructure spending.
Fed backs off monetary tightening after Trump signals less aggressive tax cuts and infrastructure spending
The Fed holds rates steady at its January 30-31, 2017 meeting, and adjusts from its telegraphed monetary tightening programme for 2017. This follows the Trump administration’s now anticipated lukewarm implementation of candidate Trump’s tax cuts and infrastructure spending plan.
Gold price soars
Bullion prices soar as it turns out Donald Trump is not quite the ‘tax-cut, borrow and spend’ president the market made him out to be during his improbable march to the White House. The gold price breaches the $2,000/ounce mark and Zimbabwe’s record haul of 30 tonnes earns the country in excess of $2 billion. Other commodities also rally, helping narrow Zimbabwe’s trade deficit.
For the first time since his appointment in the 2000 ‘war Cabinet’, Agriculture Minister Joseph Made announces an undisputable bumper harvest of the staple maize. He does not even need a helicopter ride to convince doubters. Zimbabwe’s 2016/17 maize output of 3 tonnes is the highest since records were first kept in 1960, eclipsing the previous peak of 2.95 tonnes registered in 1984. The government’s Special Maize Production Programme, dubbed ‘Command Agriculture’, is credited with this success. Buoyed and emboldened by this, the government announces plans to run a centrally planned economy, with effect from 2017.
Cash crisis? What crisis?
Zimbabwe’s stellar export performance, driven by higher commodity output and unexpectedly firm prices, coupled with newfound import restraint, sees the country recording a trade surplus. As exports reach $6 billion, the Reserve Bank of Zimbabwe begins winding down its Bond Note-anchored ‘export incentive scheme,’ widely misconstrued as the re-introduction of the Zimbabwe dollar by stealth.
The Bond Note, a parallel currency pegged to the US dollar, which has helped ease a biting shortage of US dollars in the economy, is withdrawn from circulation amid a deluge of US dollar liquidity in the economy. Long lines at the banks, a common feature throughout 2016, are a distant, fading memory.
In scenes reminiscent of Bangladesh in 2007, when rich and powerful Bangladeshis panicked and ditched the trappings of ill-gotten wealth (Mercedes Benz, Porsches, Hummers and exotic pets such as deer and peacock) by the roadside with lifestyle auditors and corruption busters in hot pursuit — Zimbabwe’s dubiously affluent and bent officials jettison all evidence of dirty money amid a crackdown on graft.
After several false starts, the anti-corruption commission embarks on actual graft-busting which leads to actual prosecution of actual corrupt people with actual consequences.
Government starts taking action on the Auditor General’s reports.
Urban transport jungle tamed
Zimbabwe signs a $500 million deal with the China Rail Group Limited for the construction of a light-rail transport system for Harare. China’s Export-Import Bank will fund the project, which is set to transform the capital’s transport system upon completion in three years. The project is part of a broader rapid transit system for both Harare and Bulawayo.
Twenty years after outlawing Peugeot ’emergency taxis’, the government has resolved to ban 15-seater ‘kombis’ and tame the urban transport jungle. Brazilian experts have been contracted to develop the Bus Rapid Transit systems for both Harare and Bulawayo.
ZRP scales back roadblocks, cops carry swipe machines
After years of belligerently shouting down calls to reduce its presence on the country’s roads, the Zimbabwe Republic Police (ZRP) announces a drastic cut in roadblocks. The ZRP also says it has scrapped its daily ‘retention target’ of $150 per police officer after improved Treasury allocations to the force. Police manning roadblocks will no longer be allowed to demand cash payments for fines from motorists but will carry swipe machines instead.
Mystery $15 billion treasure found at Nharira Hills
An expedition by a group of anthropologists and devotees looking for the mysterious Sekuru Mushore (or his successor) to the mythical Nharira Hills to the west of Harare, stumbles upon pile upon pile of sacks filled with diamonds. The find rivals the 2011 discovery of a $20 billion treasure (diamonds, gold and jewellery) at a shrine in Thiruvananthapuram, the capital of India’s southern Kerala state.
Diamond expert Jamel Ahmed immediately values the treasure at $15 billion, nearly four times Zimbabwe’s 2017 national budget.
It is not immediately clear if the diamond find is connected to the $15 billion loss President Mugabe said Zimbabwe suffered in the grand, decade-long heist at its Marange mines, but the Government swiftly gazettes a statutory instrument appropriating the treasure.
Finance Minister Patrick Chinamasa makes a revised budget statement in Parliament “taking our happier circumstances into consideration.” He proposes to use the $15 billion to build forex reserves, clear Zimbabwe’s arrears, spend on health, energy and road infrastructure and targeted support for agriculture, industry and mines.
A day after Chinamasa’s revised budget, Government spokesman Chris Mushohwe issues a statement saying Cabinet had TWICE rejected Chinamasa’s proposals. Instead, Cabinet has approved plans to increase civil servant salaries, allowances and bonus payments. Cabinet has also approved a combined $5 billion order with Russian and Chinese aircraft makers for both passenger and military equipment.
The chronically underfunded President’s Office, Ministry of Home Affairs and Ministry of Defence will also get more funds.