Will Zimbabwe’s current ESAP 2 work where ESAP 1 failed dismally?

Prof. Mthuli Ncube

In the weeks leading up to the poorly kept secret of his impeding appointment, he campaigned hard for the position, coming out of a long diasporan silence to write articles outlining what he would do to tame Zimbabwe’s unwieldly economy. His many slavish supporters played up his scholarly qualifications, the international finance organisations where he had been a functionary and so forth.

By Chido Makunike

It was as if the man could walk on water like Jesus purportedly did, or leap over skyscrapers with a single bound, like Superman. Given all the hype around him, his eventual appointment in October
2018 was almost an anti-climax.

It wasn’t long before he began to backtrack on some of his pre-appointment expressed views, such as the need to swiftly ‘abolish’ the widely derided ‘bond note’ currency/non-currency (which it is depends on who you ask, and what time of day it is.) Having been parachuted into his position after more than a decade in places like Switzerland, the Zimbabwean social, economic and political realities quickly, rudely began to dawn on him.

His unwisely forecasted projections on when things would begin to normalise began to shift with the winds of which audience he happened to be addressing. Every time he foolishly said ‘six months,’ it was as if he had forgotten that the internet never forgets! It turned out that a Mthuli Ncube ‘six months’ is as undervalued as the US dollar was in the mad, mythical period of it being officially pegged at “one is to one” with the Zim dollar!

Holding on to the fiction of the parity between those two currencies, despite pre-appointment pledges to let go of that fantasy and let the market determine the rate between them, was yet another factor that quickly began to dent Superman’s credibility. When reality could no long be ignored and the Zim dollar was allowed to float, it was done in an arrogant, capricious way that gave no nod at all to the fact that he had flip-flopped on the issue. Instead of getting accolades for accepting the exchange reality out on the street, his grudging official acceptance of that reality only earned him more scorn and distrust.

But Ncube is not one to admit mistakes or self-contradictions. Reminders of his flip-flopping or his widely off the mark targets were simply flipped off with ‘we know what we’re doing,’ despite ‘the market’ in which he claimed to be a strong disciple showing that it stubbornly disagreed. Many policy adjustments were made on the fly, making a mockery of the arrogant confidence with which those policies had first been announced, even amidst strenuous disagreement from key stakeholder sectors without whose cooperation his reforms cannot work. When he has to flip flop in response to market and stakeholder resistance to some policy measure of his, he just hunkers down and pretends he never pronounced the policy he was renouncing, and bullishly plows ahead.

Alas, while a professor can get away with intimidating, talking down to and bulldozing his students because their progression to a large degree depends on his approval, the real worlds of ‘the market’ and the political and economic publics are much more stubborn.

Months shy of the first anniversary of his appointment, his so-called ‘austerity for prosperity’ plan appears to be ruthlessly on course, but at the cost of socio-economic devastation across the land. No matter what happens now, it is clear as never before that his ‘six month’ projections were either a cruel lie or joke. Alternatively, perhaps Ncube just didn’t comprehend what would be the effects of taking ‘austerity’ dogma out of the textbooks of its IMF (International Monetary Fund) authors and applying it in real life in a situation such as Zimbabwe’s.

Yet this is Zimbabwe’s second attempt in less than half a lifetime to implement what is essentially ESAP 2 (Economic Structural Adjustment Programme.) What went wrong the first time that moved the regime of then president Robert Mugabe to abandon ESAP 1 mid-stream? How, if it all, have the lessons of that first nasty ‘austerity’ experience been applied by Mthuli Ncube to attempt to prevent the socio-economic devastations and protests that forced Mugabe to scupper the implementation of ESAP 1?

One of the unspoken expectations of many was that ‘the professor’ had a special bag of economic tricks up his sleeve. Surely with his long CV and his love of the use of impressive-sounding economic jargon even when talking to lay, non-economic audiences; surely with all that big talk and handswaving he had a special plan?

Only to find out the ‘special, secret plan’ of the man from Switzerland and Oxford University, UK was simply to introduce ESAP 2! Sorry, no particularly original or brilliant economic recovery plan for Zimbabwe from Superman!

The IMF ESAP/austerity script is well known world-over, including in Zimbabwe, which is one reason it seems so astonishing that this is what Mthuli Ncube came all the way from economic exile in Switzerland to implement. It is meant for countries like Zimbabwe in deep economic trouble, including being way behind and unable to service their debts, and unable to productively kick-start their way out of their doldrums to prosperity. Unable to borrow on the market, they crawl on their knees to the IMF to plead for bailout debt under virtually any conditions.

Those IMF conditions for debt are what we’re being subjected to in 2019 Zimbabwe, not any special ‘prosperity plan’ coming out of professor Mthuli Ncube’s head!

This also explains why Ncube’s assessments of his own performance so vastly differ from those of the average Zimbabwean. He defines the success of his efforts by how closely and well he is following the ESAP 2 plan that has been laid out for him to be lent money by the IMF, not the effect of that script on its long-suffering and increasingly impoverished victims, the Zimbabwean people!

When he jumps back to kiss himself over his self-claimed ‘budget surplus,’ as he does every other second, it is not so much to convince a sceptical, unimpressed Zimbabwean public, but to try to convince his bank manager at the IMF that he’s doing a good job. Having the IMF embedded as supervisors at the finance ministry as part of a ‘staff-monitored programme’ is sold as if the gods have smiled upon Zimbabwe and manna is about to rain down from heaven.

Will Ncube’s IMF-ordered ESAP 2 work any better than ESAP 1 did? If you pay close enough attention to his carefully crafted confusionist rhetoric, he intends/hopes that having proved what a disciplined, hard economic taskmaster he is against the screaming Zimbabwean public, the IMF will then pat him on the back as a good boy and advance Zimbabwe a ‘bailout’ package, in the form of the first new external debt in a long time.

What’s wrong with that, many readers will ask? Surely Zimbabwe badly needs an external cash injection, doesn’t it? Are you not just criticizing for the sake of it? That depends on the purpose for which that new debt is being incurred.

What is that debt to be invested in? What brilliant new ideas does the professor intend to put that new debt to be used for that will move Zimbabwe out of austerity and towards prosperity? Ncube’s idea is to use the new IMF debt; wait for it…to pay off other debt! Out of all these games and schemes it is hoped that eventually, somewhere down the road, somehow, some way, we can then begin to attract investment and actual productive debt!

What are the chances that this hare-brained ‘economic plan’ will work any better this time than it did under ESAP 1, or than it has done elsewhere?

The issue before us is not whether Zimbabwe badly needs reforms or not. Rather, It is whether going back to the IMF to essentially let its ESAP-debt conditions determine Zimbabwe’s policies is the only or best way. Where, in which public or private forums, have the pros and cons of adopting Ncube’s
ESAP 2 (disguised as ‘austerity for posterity) been discussed and agreed on?

Ncube is not used to being questioned about his almost embarrassingly unquestioning acceptance of IMF-style austerity dogma. Yet in the decades it has been experimented with across the globe, there are many thoughtful voices who would say it has mostly wreaked further havoc on the societies it has been inflicted on. After seeing the long-term destruction this latest version of ESAP has caused in Zimbabwe in less than a year, it is time to interrogate it. It is time to question whether there is any prospect of an IMF/Mthuli Ncube-authored prosperity on even the distant horizon, or whether it is yet another pie in the sky scheme that will leave this country more indebted, less productive, poorer and even less able to eventually stand on its own feet than it is now.