Election: Initial Thoughts

Although final official results have yet to be announced, it is all but certain that President Robert Mugabe and his Zimbabwe African National Union - Patriotic Front (ZANU-PF) have taken a landslide victory in Zimbabwe's presidential and parliamentary election held on July 31. The m ain opposition party Movement for Democratic Change (MDC-T) party has dismissed the poll as a sham due to alleged large-scale rigging of the process.

The MDC-T cited the unavailability of the electoral roll until the day before the poll; the production of eight million ballot papers when there were only six million voters; the turning away of many voters ; voters casting ballots in constituencies where they were not registered; and the fact that large numbers of voters were 'assisted' in the voting booth as major flaws which meant that the process did not reflect the will of the people. Although observation missions from the African Union (AU) and the Southern African Development Community (SADC) have stated that the election was not perfect and that they shared some of the concerns of the MDC, the bodies' overall assessment appears to be that these issues did n ot alter the outcome. The observers have not released a final report , but it appears likely that they will give the election a clean bill of health. Below we highlight our initial thoughts on the likely implications of the election result for Zimbabwe's political and economic future.

Contestation Will Not Be Successful: The MDC-T has said that it plans to contest the election in the courts. However, there is little chanc e that this will be successful. For one thing, the MDC-T's allegations are likely to be diff icult to prove in court and they will not find much sympathy from Constitutional Court judges who were appointed by , and remain aligned to , Mugabe. Furthermore, endorsement of the elections by the AU and SADC will take the sting out of the MDC-T's rigging claims.

Although final official results have yet to be announced, it is all but certain that President Robert Mugabe and his Zimbabwe African National Union - Patriotic Front (ZANU-PF) have taken a landslide victory in Zimbabwe's presidential and parliamentary election held on July 31. The m ain opposition party Movement for Democratic Change (MDC-T) party has dismissed the poll as a sham due to alleged large-scale rigging of the process.

The MDC-T cited the unavailability of the electoral roll until the day before the poll; the production of eight million ballot papers when there were only six million voters; the turning away of many voters ; voters casting ballots in constituencies where they were not registered; and the fact that large numbers of voters were 'assisted' in the voting booth as major flaws which meant that the process did not reflect the will of the people. Although observation missions from the African Union (AU) and the Southern African Development Community (SADC) have stated that the election was not perfect and that they shared some of the concerns of the MDC, the bodies' overall assessment appears to be that these issues did n ot alter the outcome. The observers have not released a final report , but it appears likely that they will give the election a clean bill of health. Below we highlight our initial thoughts on the likely implications of the election result for Zimbabwe's political and economic future.

Contestation Will Not Be Successful: The MDC-T has said that it plans to contest the election in the courts. However, there is little chanc e that this will be successful. For one thing, the MDC-T's allegations are likely to be diff icult to prove in court and they will not find much sympathy from Constitutional Court judges who were appointed by , and remain aligned to , Mugabe. Furthermore, endorsement of the elections by the AU and SADC will take the sting out of the MDC-T's rigging claims.

Power To Change Constitution: Although final results were not available at the time of writing, ZANU-PF looked to be on course to secure more than two thirds of the national assembly , meaning that the party would be in a position to alter the recently introduced constitution. The crafting of the new set of laws was a volatile process , given the main parties' divergence of views on several issues such as term limits, dual citizenship , and the establishment of a truth and reconciliation commission. If it does end up winning enough seats, it is possible that ZANU-PF will look to reverse some of the provisions with which it was not happy.

Economic Outlook Uncertain: The effect that the result will have on the economy is difficult to predict and will depend on the line that the ZANU-PF regime takes. Nationalism was at the centre of the party's campaign platform with a promise to empower black Zimbabweans by transferring to them equity stakes in companies currently owned by foreigners and non-bla ck Zimbabweans. This is likely to keep at bay the foreign investment that is sorely needed to inject liquidity into the dollarised economy, and this will constrain economic growth. ZANU-PF has indicated that it will consider reintroducing a domestic currency that will give the domestic monetary authorities the capacity to expand the money supply to stimulate the economy. Given the economy currently lacks the foreign exchange reserves to underpin the value of such a currency, there is a risk that a return to a local currency will lead to a return of inflation and general macroeconomic instability that hobbled the economy in the 2000-2008 period .

That said, n ow that ZANU-PF has regained power, the incentive to fle x its nationalistic muscles to w in over voters has been reduced - especially since , governing on its own, it will not have to differ entiate itself from the MDC-T , which is more open to foreign participation in the economy. Indeed, many ZANU-PF officials have significant business interests that will benefit from the economic boost that would come from an influx of foreign investment , and this may lead the party to moderate its position. Another point to consider is that during the life of the coalition government, Finance Minister Tendai Biti (MDC-T) repeatedly complained about the fact that revenues from the country's diamond mines (which are controlled by ZANU-PF-aligned companies) did not reach the national coffers. Now that the finance ministry will be controlled by a ZANU-PF appointee, there is a greater chance that diamond revenues will boost fiscal spending and help to inject more liquidity in the economy in general.

Mugabe Succession To The Fore: Mugabe will be 94 when his new mandate expires in 2018. Although he has stated that he intends to serve his entire term, there is real possibility that he either becomes unwilling or unable to continue given his advanced age. His ZANU-PF party has reportedly been embroiled in a succession battle between two factions, one headed by Vice President Joyce Mujuru and the other by Defence Minister Emmerson Mnangagwa. Unless Mugabe anoints a successor, the jostle to replace him when he does depart the scene could end up disrupting the party's ability to enact policy. The identity of the eventual successor also stands to impact Zimbabwe's political and economic trajectory. It is widely believed that Mujuru is more moderate and open to working with other political parties while Mnangagwa, who is reported to have the backing of senior military figures, is more hardline in his ideology.

Relations With International Community: Western nations and ZANU-PF have had a fraught relationship over the last decade with Western governments imposing travel bans and asset freezes on entities and senior individuals associated with the party. These targeted sanctions have been used as rallying cry by ZANU-PF during their campaign with claims that the measures were a primary reason for economic turmoil in the early 2000s. The vast majority of those targeted were removed from the sanctions list in May 2013 following the approval of a new constitution. Western observers were not allowed into the country for the vote, but the West said that they would completely remove sanctions if the AU and SADC were to give the election a clean bill of health. With the opposition claiming fraud, the West faces a difficult choice over whether it will deliver on this promise. The removal of the targeted sanctions themselves will have little economic effect, but would be lauded as a political victory by ZANU-PF. The real economic benefit from a normalisation of relations with the West will come if and when Zimbabwe regains access to multilateral funding. However, this will depend on further economic reform, and most importantly on a deal to address the country massive external debt arrears.

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Sector: Country Risk
Geography: Zimbabwe, Zimbabwe, Zimbabwe, Zimbabwe
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