A new paradigm needed to deal with Africa’s problems

After a lifetime of watching news on international news channels like BBC and CNN, I have began to recognise certain code language of the news presenters. If they start a news item with a warning that images about to be shown may be distressing to some viewers, I recognise instantly that the news item is about Africa. And what usually follows are heart wrenching images of starving children with protruding stomachs and flies feeding out of their mucus-filled noses, bed-ridden Aids sufferers facing their last moments, mutilated victims of political and other forms of violence and similar distressing scenes.

This past week there has been a continuous deluge of such imagery emanating from the Democratic Republic of Congo (DRC) where fresh rebel attacks in the eastern areas of the country have triggered another humanitarian catastrophe. As is now all too common, the international community is rallying efforts to confront the unfolding tragedy. Humanitarian organisations are struggling to attend to the many suffering people while leading politicians have negotiated a cease fire and are pushing for urgent talks between the belligerents to secure future peace and stability. Perhaps, and just perhaps, the current ceasefire will hold and sooner rather than later the whole issue will again be forgotten only to resurface at some other point in future, as it has done in the past decade or so.

Superimpose this humanitarian catastrophe on other desperate situations elsewhere in Africa – Darfur in Sudan and Zimbabwe, of course – and you begin to have a sense of the depth of the hole which the continent of Africa is in and how much it has to work to dig itself out of the morass. It is all very well to claim that there are some successes elsewhere on the continent but the sheer scale of failure in these few spots dwarfs any small successes as may be claimed. There have been many attempts to explain why Africa, despite its unimaginable wealth of natural resources and other God-given blessings, remains wallowing in the depths of poverty and underdevelopment.

Leading historians, scholars and other researchers have not reached a consensus on these issues. Some few years ago, a professional friend recommended to me a book by Chabal and Daloz entitled Africa works: Disorder as political instrument. In this book, the authors argued that the acuteness of Africa’s crises is such as to defy the usual parameters of current political analysis because the reality of the politics in contemporary Africa is exceptionally multi-faceted as compared to the realm of politics in the West which is relatively well-defined and self-contained. Chabal and Daloz described a new paradigm for Africa which they labelled the “political instrumentalisation of disorder”.

This paradigm referred to the process by which political actors in Africa seek to maximise their returns on the state of confusion, uncertainty and sometimes even chaos which characterise most African polities. They argued that all African states share a generalised system of patrimonialism and an acute degree of apparent disorder which is “evidenced by a high level of governmental and administrative inefficiency, a lack of institutionalisation, a general disregard of the rules of the formal political and economic sectors and a universal resort to personal(ised) and vertical solutions to societal problems”.

Aha, I thought! That sounds all too familiar! That may certainly explain why in a country which is reeling with inflation measured in billions of percentage points, where hospitals are empty of any drugs, where a majority of citizens are surviving on wild fruits and roots and where the education system has completely collapsed; the country still has sufficient resources to pamper its judges with the latest models of cars from Bavaria, plasma television sets and other creature comforts. Plausible as Messrs Chabal and Daloz’s theory is, it still does not explain why and how the ruling elites in Africa are allowed to get away with this destructive buffoonery by their own people and by the international community which professes a different set of values.

More recently I have been reading Martin Meredith’s The State of Africa: A history of fifty years of independence in which he states that Africa’s per capita national income is one-third lower than the world’s next poorest region – South Asia, and in most countries the per capita incomes are lower than the levels of 1980. Meredith argues that Africa has generally suffered from weak political governance characterised by “bloated bureaucracies and systems of regulation… (providing) the means by which ruling elites provided jobs, contracts and other opportunities for gain for kinsmen and political supporters”. Again, that sounds quite familiar but again there are no suggestions on how these ills can be tackled.

The standard response of the international community, especially the developed countries, has been to apply diplomatic though regional institutions such as the SADC and AU. Given the predominance of similarly inclined colleagues in such institutions, the approach has not been successful giving rise to the notion that African leaders are not amenable to diplomatic influence. And when such pressure has not yielded the expected results, they have thrown in conditional-laden aid packages in an attempt to bribe or coerce the errant regimes to conform. All this humanitarian aid that is provided to distressed countries serves no useful purpose than to encourage the rogue leaders to disregard their obligations to look after the interests of their citizens and, instead, allows them to concentrate on strengthening their hold on power. They simply do not care about the suffering of their people.

When all such responses have failed, the next options has been to apply the so-called smart (or targeted) sanctions aimed purportedly on the leaders but, in reality, are general sanctions which hurt the ordinary citizens much more than they do the leaders. These smart sanctions generally include travel bans and freeze on personal assets which, unfortunately, also do have very limited impact on the targeted people who have many ways and means to circumvent the sanctions. More recently, the erring leaders have been threatened with prosecution at the International Court of Justice in the Hague however the effect of this is still to be fully assessed. Al least, this has elicited some welcome anxiety in the case of Omar al-Bashir of Sudan who has recently been indicted for crimes against humanity.

My view, however, is that any such measures are incremental and insufficient to drive the change which is so necessary in the governance systems in Africa. What may be required is external military intervention to depose obnoxious and weak regimes and replace them with stronger administrations. From time immemorial, weak and unpopular regimes have been overthrown by the citizens and, where this was not possible, where invaded by stronger neighbours. I do not have a quarrel with the doctrine of national sovereignty but I believe that it has its limits. National sovereignty should be respected only where the leaders also respect universally recognised and accepted democratic conventions and norms – such as the protection of their citizens and the respect of human rights.

In the case of the DRC, it is quite clear that the regime there is pathetically weak and is incapable of providing effective administration and protection to its citizens. The stationing of the largest peace keeping force in the world in that country has not brought any noticeable peace and tranquillity and is not sustainable in the long term. There may therefore merit in allowing stronger forces in the region to move in and take over administration of the country. I suspect that the likes of Rwanda would relish that prospect. It may initially be messy, I should admit, but it could provide long term stability to the country and provide its people with much needed relief from perennial suffering.

The end of an unlikely journey. Or is it the beginning?

In less than one week, the United States’ public go to the polls to elect their president for the coming four years and that event will bring to an end what has been the most reverting political contest in history. For as along as I can remember, I have been intrigued by US elections. Many of the elections have produced their iconic moments which remain etched in my memory and heighten my fascination with what must surely be the biggest political reality show on earth.

I recall that many, many years ago when Jimmy Carter secured victory over Gerald Ford one African-American walked to his inauguration carrying a placard emblazoned with the message “Jimmy Carter, here I come” to illustrate the black support for Carter’s candidature. I also followed very closely Bill Clinton’s surprise success against the incumbent president George H Bush. And four years ago I stayed up into the early hours of the night to follow the results of the contest between the younger Bush and Senator John Kerry.

But nothing and I mean nothing had prepared me for the thrill and emotional rollercoaster of the present electoral contest. It is not just the historical context of the contest – the potential of the first non-Caucasian president of the world’s only superpower. It is not just the prospect of the improbable realisation of the previously unthinkable – that a predominantly white nation and white electorate will vote a black man into the presidency of their great nation. It is much more than that. It is a moment of such profound social and historical significance that it will be remembered with both awe and astonishment by future generations and for many decades and centuries to come.

It is too early to predict the outcome of the elections and, as they say, a week in politics is a very long time but the signs are looking good for Senator Barack Obama. He is enjoying a comfortable lead in the polls and the campaign of his rival appears to be in some state of disarray. Of course, anything can happen between now and Tuesday next week – like some crazy act of terrorism being perpetrated by some groups spoiling for a fight with America or, even more fearful, an assassination of Senator Obama by some extremists.

Assuming that none of this happens and that Obama proceeds to win the election as is now widely anticipated, what is going to happen? First there will be a huge and collective sigh of relief around the whole world. Obama appears to be the favourite candidate of the world, if the results of global polls are anything to go by, and his success against considerable odds will be received with much relief and elation. An Obama victory will, in one master stroke, transform perceptions of how America is viewed by both her enemies and her friends. It will have demonstrated that regardless of its demonisation by many, America can and will dare to be different and that she is well and truly the bastion of freedom and innovation on the planet.

For how else can one explain how a first generation African American born of an African father bearing an African name and a white American mother, who was brought up in Indonesia and the faraway island of Hawaii be elected the president of the most powerful nation on earth? That could never happen anywhere else in the world. Members of minority groups have little or no chance of being elected presidents unless they do so through force of arms, much less do those who are considered as foreigners – as no doubt Senator Obama would be considered in many parts of the world. In Africa, one must be exhibit a high degree of affiliation and affinity with the appropriate national, ethnic and tribal groupings before they can be elected into leadership positions.

I have said it before and I will say it again, the election of Obama in the US will be a good thing for Africa. It will make it that much more difficult for the despots on the continent to defend and deflect criticism of their repression as machinations of the racist West. For far too long the standard reaction to criticisms of African leaders for their undemocratic practices and abuse of human rights has been that Africa is being victimised by the West who have racist tendencies and a neo-colonialist agenda. This has somewhat tempered the appetite for a more robust confrontation by the West to many of the excesses of the dictators. But this is unlikely to remain the case.

A victory for Obama will precipitate a whole rethink on how democracy is practiced in Africa. Because of his much closer ties to Africa (the land of his father), Obama is likely to encourage a more aggressive engagement with the continent. That will mean getting closer to those nations that share the principles of good governance and, even more importantly, confronting those that disregard acceptable democratic behaviour. Leaders like Robert Mugabe are likely to face a much tougher scrutiny and challenge of their policies. It will not be as easy to dismiss President Obama’s criticism as it was with President George Bush’s protestations.

Obama will come into office with relatively clean hands. He opposed the Iraq war from the beginning and he has pledged to pull out the troops as soon as possible after he assumes office. If he follows through with that promise then it may mean that the US will be fighting one less war and may have the resources and the capacity to deploy its military to other troubled spots. I believe there are areas like Zimbabwe in which such intervention is long overdue and will be most welcomed. I doubt very much that Obama will be a soft touch on human rights issues and he may, in fact, seek to take America in an entirely new direction to assert America’s leadership on democracy and human rights.

A victory for Obama will also strengthen many people’s belief in democratic electoral processes and put new meaning to and emphasis on democratic means of resolving political conflicts. In Africa, in particular, there has been a loss of faith on elections as a democratic process. Recent elections held in Nigeria, Kenya and Zimbabwe have left voters very disillusioned and frustrated by their inability to express their wishes though the ballot box. Incumbent ruling parties have ridden roughshod over the wishes of the electorate though blatant vote rigging, disenfranchisement of voters and manipulation of electoral results.

There are suspicions that Senator Obama will be denied victory next week through similar machinations. In the event that Obama wins (implying that no chicanery has taken place) people everywhere will feel that there is value in using one’s vote to achieve political objectives. This will, in the long term, discourage the use of violence and other undemocratic means to achieve political change. Peace and tranquillity will descend on many hotspots around the world and that will, in turn, usher in higher levels of prosperity and development in the world.

Maybe I am being too optimistic and fanciful. In any case the American people still have to complete the voting on November 4 and the votes still have to be tallied and the winner declared. Until that happens, everything remains as mere speculation and wishful thinking. But as Senator Obama has so eloquently suggested, there is merit in believing in “the audacity of hope”.

Desperation and cynicism stocking political impasse

There really must be something good in the political agreement signed on 15 September this year by the political antagonists in Zimbabwe. If it was such a bad deal why is Mr Mugabe and Zanu-PF working desperately to wreck the agreement? And why, indeed, is Mr Tsvangirai and the MDC pushing so hard to have the agreement implemented?

It does not require a lot of imagination to see that there is an element of desperation surrounding the agreement on both parties but for apparently different reasons and motives. To understand what is really happening, it is necessary to get back to the basics – to the justification and purpose of the political settlement.

The need for a negotiated settlement arose out of the reality that Mr Mugabe and his party lost the 29 March election to the opposition. After lengthy delays in announcing the results of presidential ballot (presumably to allow for the manipulation of the results) the contest was declared inconclusive necessitating a run-off contest to choose a winner. The victorious opposition initially acquiesced with this blatant subterfuge but soon realised that the contest was not going to be anyway near fair as their supporters were raped, maimed, murdered and otherwise brutalised. They withdrew from the run-off contest leaving Mr Mugabe to romp home alone in a “landslide victory”.

Unfortunately, the Pyrrhic victory was roundly condemned by all and sundry thus rendering Mr Mugabe’s presidency illegitimate. It is on this basis of illegitimacy that Mr Mugabe, at the prodding of his erstwhile colleagues in the African Union and the SADC, agreed to enter into mediated negotiations. In the circumstances, the negotiations were intended to serve one purpose only – to purge the illegitimacy that had befallen his rule and, by extension, the country.

The resultant agreement would become valid and relevant only to the extent to which it removes the illegitimacy. There were obviously a number of options for achieving this objective. The first would have been to negotiate the complete handover of power from the illegitimate government to a legitimate government based on the people’s will as expressed in the 29 March elections. This would have meant that Mugabe and Zanu-PF would be completely removed from power. This was my favoured option (and I suspect that of many others pundits and observers) but, unfortunately, it was not favoured by the mediator, Mr Mbeki former president of South Africa.

Another option would have been to call for a fresh election which is internationally monitored and supervised to ensure that the failings of the previous elections were not repeated. This would have been the best option because it would have laid to rest once and for all the argument of which leader has the true support and mandate of the people of Zimbabwe. However this option was not considered because the outcome had already been pronounced in the last “fair” election of 29 March. There was no prospect whatsoever that the outcome would be any more different to the “humiliating” defeat which Mr Mugabe had suffered in that earlier round. In fact the prospects were high for an even more humiliating defeat.

This led to the third option – a government of national unity. Under this option, Mr Mugabe would lose his power – not suddenly but in a gradual manner. The GNU was never intended to nor would it have been practically able to confer a stamp of approval (or legitimacy) to Mr Mugabe’s rule. It was only meant to allow the opposition to partly assume the power which they had legitimately won on March 29 while, at the same time, partly wresting from Mr Mugabe the powers which he had lost on March 29 and illegitimately acquired through the invalid June 28 elections.

In my view, the September 15 agreement clearly reflects this dynamic of one party gaining power and the other losing it. That is the only basis upon which this agreement works and, in consequence, will provide legitimacy to the continued tenure of Mr Mugabe on the political landscape in Zimbabwe. The problem is that Mr Mugabe has now come to realise, rather quite late in the process, that he is no longer in charge and that his time at the helm is now virtually over.

Mr Mugabe realises now that by sharing power with the opposition, this will deprive him and his party from manipulating the levers of the state to sustain their continued hold on power. This loss of control will result in his total demise in the not too distant future – whenever it is that the next elections will be held. That is now why he wants out of the deal. I really do not think the problem is about the sharing of cabinet positions. This is important but, in my view, largely symbolic. Governments operate on the principle of collective responsibility and it is never going to be easy for any party to dictate government policy solely on the basis that they hold a certain cabinet position.

Mr Mugabe’s problem is not that he does not want to share the cabinet portfolios equitably - he simply does not want to share anything at all. Sharing means losing something and the old man is not terribly keen to lose anything. But does that mean that he is willing to risk completely destroying the country (whatever is left of it, anyway!) by pursuing a course of complete isolation which his continued illegitimacy will no doubt bring? I doubt it very much. I don’t believe he is that foolish or that clever. He should surely know that retreating from his present position will only invite more attacks from his enemies at a time when his defences are weak and vulnerable.

What Mr Mugabe wants now is to gain as much concessions as he can possibly get away with from the MDC while, at the same time, buying some time to regroup and re-strategise for his future. He is never going to walk away from this agreement because there is nothing else out there that will serve him better. For this reason, it is folly for the opposition to either walk away from the agreement or to give any more ground to Mr Mugabe. They should hold their line and wait it out.

As the opposition holds out, Mr Mugabe’s actions are now clearly and increasingly fuelled by a deadly mixture of desperation and cynicism. Gazetting the allocation of cabinet posts when these had not been agreed by the negotiating parties was a desperate and reckless act of bravado. For Mr Mugabe and his “government” to continue to deny Mr Tsvangirai, the prime minister designate and the next head of government, a passport to enable him to freely travel is a cynical act of the worst kind.

Either of the cases reflect a total lack of seriousness, sincerity and maturity on the part of Mr Mugabe and his party at best and, at worst (and probably more appropriately), an unacceptable degree of recklessness in the face untold hardships. Whatever the case Mr Mugabe should not be allowed to delay the process of change and divert attention from the urgency of resolving the country’s political impasse in order to provide relief to the suffering masses.

Politics of power to politics of ideology

The ongoing presidential elections in the United States of America raise many important lessons for fledgling democracies around the world – especially in Africa. Of course one must appreciate and accept that the American experience in democratic process goes back some centuries unlike in much of Africa where it goes back only a few decades. If one discounts the many years wasted under military and civilian dictatorships, that experience is whittled even further down to not more than a dozen years in the best of circumstances.

That lack of experience should, however, not be an excuse for the sorry state the continent finds itself neither should it be justification for continued repression and the many undemocratic travesties perpetrated against the poor people on the continent. The whole point of history is to learn from the past in order to avoid similar pitfalls and to help make better decisions for the future. In Africa it seems quite in vogue to disregard past lessons and repeat the errors from history with the mistaken and misguided expectation that the results could be different. It is time our leaders and our people started learning the lessons from other countries’ experiences.

The first lesson for me is that politics is not just about power (raw and unbridled) but it is really and mostly about ideology. The contest between Senator McCain and Senator Obama is, at its centre, a contest of ideology – conservatism or liberalism as defined by their political parties – the Republican Party and the Democratic Party. With all his charisma and eloquence, Obama would not have progressed very far if he did not subscribe to or support the Democratic Party ideology and policies. With all his war heroism and extensive political experience, McCain would be nowhere if he was outside the umbrella of the Republican ideological framework.

While both candidates have trumpeted their bi-partisan inclinations they have been very careful not to alienate themselves from the core values and principles of their parties. In fact the candidates have had to temper their more extreme inclinations and preferences to retain their core supporters. In Africa, politics is about power and success usually accrues to the one who holds the best levers – those who control the strongest or most vicious militia, those who have the most money to buy supporters and the ruling incumbents who are able to manipulate the electoral processes in their favour. There is thus a sense of disbelief if, after leveraging all such advantages, some candidates still lose elections and refuse to concede to the victors.

The issue of ideology will also help to limit the number of parties that contest elections – or at the very least limit the number of real competitive parties. In my view, one of the problems faced in African politics is that there are too many contenders for political positions and this provides the electorates with too many options much of which are not really different. In the circumstances, the prospects of making wrong choices multiply quite significantly. Under the western democratic systems, there are few parties in contention and this enables voters to make considered and informed decisions on whom they wish to elect.


Another thing that strikes me as highly admirable about the US elections is the degree of civility with which the contestants deal with each other. I struggle to appreciate the complaints being traded between the presidential contestants about negative campaigning. Much of what I have heard is pretty mild if not downright polite when compared with the viciousness with which elections are conducted in Africa. While personal insults are traded in abundance, it’s the naked intimidation and physical violence that is the central modus operandi of African politicians. The use of state security agencies by the incumbent government is very common while there is also rampant use of private militia and vigilantes to advance one’s political goals.

The violence is systematic and those who engage in it do so with a degree of impunity as the law enforcement agencies and the judiciary have been compromised. So when people go and vote, they are likely to make their choices out of fear of the possible repercussions and usually out of self-preservation motives. One outgoing president famously remarked in a recent election in an African country “This election is a do or die affair”. Such statements provide the licence to the brutality and deviousness with which elections are conducted.

An unfortunate outcome of this kind of approach to electioneering is that the loss of political power usually heralds the end of the road for the loosing party. The successor party will employ the very same methods to entrench themselves in power until some other party emerges to dethrone them. And so it goes on and on. If loosing parties, especially ruling parties, had realistic options of coming back into power in future they would be less inclined to resist election results which are not in their favour. In the UK, for example, after many years of Conservative rule under Mrs Thatcher and Mr Major, the Conservatives lost the 1997 elections to the Labour Party. After more than ten years in power the Conservatives look like they are on their way back, if recent polls and results from local government lections are accurate indicators. In the US, the Democrats have a more than fair chance of winning against the Republicans who have been ruling for eight eventful years.

There may be some gamesmanship and a certain level of rhetorical viciousness in the election campaigns between the competing candidates and their parties in the US but there is no “do or die” nonsense characteristic of elections in Africa. As I see it, in Africa politicians have a serious disrespect of the electorate. They do not accept or recognise that the citizens can and should exercise their own free will in deciding whom they want to rule over them. Our politicians believe that they can cheat, coerce, bribe and lie to get into power. With very few exceptions, no one takes notice of these shenanigans and life goes on. One irregular election is followed by another irregular election and by another – all with unfailing regularity.

While this entire tussle for power is going on, the continent is regressing. The level of poverty on the continent is escalating, social services are collapsing, economic development has stagnated and corruption is running rampart. To tackle these evils will demand a real paradigm shift in the manner in which the business of politics is transacted in Africa. There should be a migration from the politics of power to the politics of ideology.

The global economic crises – Lessons from Zimbabwe

The global financial markets are in turmoil and the world is facing an economic meltdown of an unprecedented magnitude. The governments have stepped in to introduce a raft of measures to stabilise the situation and restore confidence in the markets. The responses have been as varied as they have been controversial – from bailout packages in the US, UK and Europe to guarantees of depositor funds in Ireland, Greece and Australia. These interventions notwithstanding, the outcomes, for the moment at least, have been disappointing. The markets are plummeting and institutions are failing at an alarming rate.

But if the truth should be told, the current events are not new and have been playing out in a small corner of the globe on which attention has been on entirely other matters. In the past few years I have been conducting a doctorate research on corporate governance in Africa with particular focus on Zimbabwe and Kenya. In Zimbabwe I conducted a case study research on the financial sector which collapsed due to corporate governance failures. Reflecting back on this research, the findings reflect astonishingly closely what is now happening in the global economy and I thought I should share some of these findings and conclusions in the hope that this will be useful in understanding what has happened and in shaping a way forward.

While my case study research focused on one particular institution the issues concerned the whole financial sector in Zimbabwe and, by extension, to the national economic performance of the country. Let me start with an obvious and necessary admission. Zimbabwe may not be such a good example given other well known exogenous factors. However the situation was not always like that. Until a few years ago Zimbabwe was a reasonably performing economy with world-class financial institutions and efficient public and private sectors. What led to its slide into its current economic abyss are, in part, events which are very similar to what is now happening on the global arena.

The most telling and decisive slide of the Zimbabwean economy can be traced to 2004 when many financial institutions in the country which had tied up funds in speculative activities began to experience liquidity constraints accelerating runs on the banks by agitated depositors and, in turn, triggering the banking sector crisis. At the height of the crisis in 2004, ten financial institutions including banks and building societies, collapsed due to insolvency and liquidity problems. This mirrors the present situation where global financial institutions are suffering the effects of their exposure to the sub-prime mortgage market amid growing accusations of malfeasance by the so-called corporate fat cats.

In my research I found that prevailing economic environment largely dictates the nature of business practices and transactions. In the case of Zimbabwe, it was the unstable macro-economic environment (soaring inflation and high interest rates) which encouraged financial institutions to engage in high risk investments which provided very high near-term benefits. The long term implications turned out to be quite adverse, as the financial institutions later painfully learnt.

What is important to remember is that financial institutions are cash rich but a greater proportion of that cash is constituted of depositors’ and equity funds. Operating margins (mostly interest and changes) represents a smaller component of their funds. In a business world which avers that “cash is king”, financial institutions find themselves in a unique position of trying to play around with a large amount of funds which they have not really earned. While there are regulations which guide their activities in this regard, there is, nevertheless, a great deal of flexibility and discretion. Today’s top performers are those institutions and individuals which are adept at executing the most unusual and highly profitable financial deals. This has given rise to the widespread use of instruments such as special purpose vehicles to conduct structured financial deals.

The prevailing level of discretion may suggest the need for stronger regulation and supervision of financial institutions. Evidence from my research suggests that regulatory interventions are not always the right answer. In Zimbabwe, for example, the regulatory authority, the Reserve Bank, responded to the banking crisis by issuing a raft of control and supervisory measures many of which failed to address the problems. In the end the central bank was criticised for lacking due consideration of the risk of regulatory failure with the consequence that where failure had occurred, regulatory measures had worse effect or consequences than the failings and potential dangers they sought to address.

There is also a need to strike a balance between regulation and supervision (which are socialistic in nature) and allowing for entrepreneurship and enterprise which form the bedrock of capitalism. An effective regulatory framework should ensure that business organisations are fully aware of what they can or cannot do and the consequences of departing from the straight and narrow path. In this context regulation is not seen as an external influence but more as an enabler, bearing in mind that the existence of regulation does not, on its own, enforce compliance in much the same way as the existence of criminal law does not stop criminals from committing crime. Good regulation therefore functions as a benchmark for accepted behaviour.

In the Zimbabwean banking crisis the issue of poor corporate governance relating, especially, to executive decision making and executive remuneration seems to have played a significant role in the events which unfolded. Another important issue was that the managers of the financial institutions were also significant shareholders. I will argue here that the prevailing practice in global corporations of partly remunerating executives with stock options makes them owner-managers. Evidence from my research suggests that owner-managed institutions tend to engage in higher risk behaviour to achieve higher stock returns from which the managers directly benefit. Owner-management undermines the foundations of the “principal-agent” model which has stronger prudential properties and promotes the high risk “myopic-market” (or “short-termistic”) tendencies in executive behaviour.

It must be conceded however that executive remuneration is largely defined and dictated by prevailing market conditions. The excessive compensation packages offered to financial executives may be a reflection of efforts to attract and retain competent skills within a constricted market. In this regard, it may not be entirely reasonable to fault financial institutions for the generous compensation packages which they offer their executives. Rather, efforts must be made to increase investments in training and human resources development in order to increase supply of skills and reduce demand levels. In parallel, it is necessary to devise and adopt alternative remuneration practices which do not involve stock options. Consideration should also be given to introducing executive remuneration caps in order to reduce or limit the growing remuneration gap between low and top earners.

When the liquidity crisis first hit the market in Zimbabwe in late 2003, the Reserve Bank established a Troubled Bank Fund as a temporary measure to support banking institutions which were experiencing liquidity constraints. The fund was intended to assist the troubled banks to re-align their asset portfolios and strengthen their balance sheets. When these efforts failed to successfully resolve liquidity problems, a further step was taken to acquire the failed banks to help avoid a severe loss of depositors’ and creditors’ funds and more serious destabilisation of the financial markets. If anything is to be learnt from this experience, it is that the governments in the US and Europe which are rushing in to shore up their sinking banking institutions will realise, much sooner rather than later, that they are faced with some real tough choices.

When governments decide to bail out financial institutions they may very well help to save depositors and creditors funds. However this invariably means that investors will loose out because of the dilution of their stocks. This undermines investor confidence and entrepreneurship and has adverse effects on long term economic growth. This appears to be what is happening with the financial stocks on the global markets.

Zimbabwe may now be better known for the notoriety of its political and humanitarian situation, but a deeper analysis of the financial crisis which it experienced four years ago and which accelerated the descent into its current economic abyss may provide useful insights and lessons for how the world should be responding to the current global financial crisis. In the event, that small wretched country may, after all, become a force for good. What a forlorn hope!

Deadlock – what deadlock?

The signing of the power sharing agreement in Zimbabwe which was conducted with much fanfare and trumpeting more than three weeks ago seems to have been in vein as there has been no change on the ground since the event. If anything, the situation has deteriorated quite dramatically with the economy, officially at 230 million percent inflation, now virtually collapsed and millions of citizens facing imminent hunger.

In the circumstances one would well be justified to express pessimism with the future of the country. However I choose to be optimistic and see this is the necessary pain before true relief is visited to the long suffering people of Zimbabwe. I do not see the present situation as a deadlock; rather it is a delay to the inevitable surrender of power by Zanu-PF and Robert Mugabe. The agreement which Mugabe signed, notwithstanding its imperfections, has only one implication to him and that is the loosening and eventual total loss of power. He realises it and will try as best as he can to wiggle out but there is no way out for him. The gates are now solidly shut.

What Mugabe is doing by refusing to agree on the distribution of government ministries is simply delaying the inevitable. It is like trying to hold back a ragging river with a shovel. Let me explain further. The reason Mugabe went into the negotiation in the first place was his realisation that the status quo was doomed and could not hold for much longer. He had been rejected and “humiliated” (his words, not mine) by his people in the March 29 election and five weeks of fiddling with results had failed to sanitise the humiliation. He had not fared much better in his second attempt in June when the outcome was universally condemned even by his erstwhile comrades in the African Union.

The only way out for him was to negotiate to either be accommodated in the new power vortex and/ or to secure legitimacy to his obviously illegitimate rule. That position has not changed and will not change if the power sharing agreement fails. He needs this agreement to work as much as a junkie needs a fix. He also knows that the agreement is a very good deal for him and nothing substantially better is likely to come his way in a new round of negotiation.

The consensus out there is that the opposition compromised a lot and, with that experience, they are very unlikely to be more accommodating in future negotiations. They accepted to retain him and his deputies in the presidency and offered him amnesty against prosecution for his many human rights abuses. That is precisely why the opposition have not given in on the issue of sharing of the cabinet seats. They have already done all the giving in and are under no obligation whatsoever to continue to appease the ungrateful dictator.

But Mugabe is playing a dangerous brinksmanship game with them. He is hoping that somehow the opposition will blink and accept a junior role in government thus effectively leaving him in control. His generals and his party are cheering and urging him on but every one of them knows that this is not going to happen. It must be remembered that this whole issue is not about Zanu-PF or about the army generals not wanting to salute anyone other than Mugabe. They are all irrelevant and side issues. The real issue is about Mugabe and, more precisely, stripping him of power and showing him the door.

And that happened on September 15 when Mugabe signed the power sharing agreement in which he, among other things, committed to sharing governing authority with the opposition. Unhappy as they may be with the deal, the generals and Zanu-PF can do absolutely nothing to change the new dynamic. That brings me to the issue of the distribution of cabinet posts. There are four posts which the opposition should insist on controlling. The first is the ministry of finance. The adage that he who holds the purse strings calls the tune has never been truer than in the case which Zimbabwe faces and will confront in the new dispensation. Mugabe and Zanu-PF have destroyed the economy of the country and it will be sheer madness to allow them to continue holding the safe keys.

The second is the ministry of home affairs which controls the police. Everyone knows that under Mugabe the police failed miserably in discharging their duty of protecting the people of Zimbabwe and, if anything, engaged in brutal repression and human rights abuses. There is a crying need to speedily reform the police force in order to protect any gains of freedom which will be ushered by the new dispensation. Without control of the police by the opposition, Zanu-PF will continue to use the force to protect its criminal elements. Another and perhaps more subtle reason for the opposition to control home affairs is to allow the prime minister to be issued with his passport which he has been denied for many months – home affairs controls the office of the registrar general which is responsible for issuing passports.

The third is the ministry of information. There is no doubt that Mugabe’s hold on power has been prolonged by his iron grip on the levers of information. Opening up of the airwaves and unfettered freedom of expression are absolute sine qua non for success of the new dispensation. The press should be unshackled to allow it to both report fairly and accurately on what is happening in the country and, even more importantly, to investigate and expose any undesirable elements and activities. A free press will be the real guarantor of the people’s hard won rights.

The forth but by no means the last ministry which the opposition should control is that of justice. Mugabe and Zanu-PF have become synonymous with miscarriage of justice and selective application of justice. The judiciary has been severely undermined and compromised and requires urgent and concerted rehabilitation. There is need for a new justice system which is truly independent and does not pander to the whims of the executive and the ruling elite. The judiciary should once again be seen as the ultimate protectors of civil liberties and as impartial adjudicators, not as defenders of an unacceptable status quo as is the case at the moment. Zanu-PF cannot and should not be entrusted with this onerous responsibility.

There should really be no negotiation about the rest of the ministries. These can be tossed into a hat and drawn to each of the participating parties. Once this is done, the new cabinet should be sworn in and commissioned to proceed with speed to do what they are supposed to do – get the country back on its feet and relieve the suffering of the Zimbabwean people. The people have waited far too long for this to happen. They should not be asked to wait any longer.

A president who will not be missed

“Good riddance of bad rubbish” is, I suspect, how a lot Zimbabweans will greet the news that President Thabo Mbeki has been given the sack from the presidency by his party the ANC of South Africa. To say that this is the best piece of news I have heard for a long while is, perhaps, a serious understatement. Of course I was aware that President Mbeki had not endeared himself to many of his compatriots and to the generality of the suffering masses in his country’s neighbourhood.

The signs have not been good for him for quite a while. President Mbeki famously denied that HIV caused AIDS and denied or blocked government action to relieve the suffering of many of his people who were afflicted by the deadly disease. Only in the face of overwhelming global pressure and mounting evidence of the deadly carnage that the disease was wrecking in the country, did Mbeki relent and allow unhindered implementation of AIDS prevention and treatment programmes. But the damage had been done to his credibility and sense of judgement.

Mr Mbeki also launched a crusade to weaken, sideline and punish those he considered as threatening his leadership position. Tokyo Sexwale and Cyril Ramaphosa were early victims and Jacob Zuma had been a target for a long period. Ironically, it is his relentless pursuit of Zuma which has driven Mbeki to his Waterloo before his term as president of the South African Republic had expired. The writing was on the wall when Mbeki dismally lost to Zuma in his attempt to extend his tenure as president of the ruling party by another term. And when he was fingered by the judiciary as having interfered in the prosecution of his nemesis, the game was well and truly up. There was only one way out for him – to drink the cup of poison.

However it is for his role in Zimbabwe that Mbeki will forever be remembered by many people around the world. For eight long years, President Mbeki has worked hard to prop and protect the discredited, increasingly unpopular and brutish neighbour in the north, Robert Mugabe. Of course the support has not been overt and tacit - even a man of his immense power and influence could not openly condone the excesses of his neighbour. But his so called “quite diplomacy” had, to many impartial observers, become a euphemism for protectionism of the abhorrent Mugabe regime.

For eight long years, and perhaps more, President Mbeki watched as Mugabe, in a fit of madness, reduced what was one of the strongest economies in Africa into a complete basket case of poor and hungry masses. He watched or, more accurately perhaps, turned his eyes away as millions of Zimbabwean flooded across the borders to escape political repression and poverty in their home state. He watched and acquiesced as Mugabe stole repeated elections through naked violence and blatant rigging. When his observers and advisors reported on the malfeasance of his neighbour, he ignored or suppressed their reports.

For a long eight years, President Mbeki positioned himself as the mediator of the conflict in Zimbabwe vowing that he would end the unfolding tragedy while he supped with the devil, clasped hands with him and declared to the incredulous and bewildered world that “there is no crisis in Zimbabwe”. With such comforting support, Mugabe was allowed to freely proceed and do what he knows best – inflicting untold pain and suffering on his people.

Many are celebrating the recently concluded talks on a government of national unity in Zimbabwe as a triumph of Mbeki’s consummate diplomacy skills. But even more people will beg to differ and the verdicts have already starting coming in. The agreement has, at best, been received with universal scepticism and, at worst, with outright rejection by many important stakeholders. Even before the ink on the agreement was dry, his long-term beneficiary, Robert Mugabe, was complaining loudly and bitterly to the entire world that he was unhappy with the agreement because the opposition “demanded more than they deserved”.

As I write this article, there is a reported deadlock on the sharing of cabinet positions because Zanu-PF is reneging on earlier understandings and demanding a control of all the strategic ministries while relegating the opposition to second-tier and less strategic portfolios. The signs are not good for the future of the agreement as long as Mr Mugabe remains in any sort of control. Mugabe has been and continues to be the albatross around Zimbabwe’s neck. That is the cardinal fundamental that Mbeki never got to understand or accept through the long eight years of his so-called facilitation.

The departure of Mr Mbeki, deserved and welcome as it is, will be very good news for the oppressed people of Zimbabwe in particular and the African democratic movement in general. It is good news because Mugabe will realise all too quickly that he has lost his protector and has to settle for what he has got now. Mugabe’s hand will now be forced to make this deal work otherwise he will be forced into another election which he will dismally loose. Mugabe is no fool and he should realise that any attempt by him to jettison the unity agreement will have far less attractive consequences for him because the successor regime in South Africa is likely to be far less accommodating to his dictatorial excesses and his waywardness.

For the democratic movement generally, the fall of a powerful political personality like Mbeki was again confirm the time proven tenet of democracy that no leader is mightier than the people he leads. The problem we have had in Zimbabwe (and indeed in other countries under dictatorship) is that Mugabe had grown to believe, rightly or wrongly, that he was bigger than the people of Zimbabwe. That is why he does not respect their intelligence (as attested by his continual attribution of his unpopularity to the British and American interference) nor care for their suffering.

The jettisoning of Mbeki by his party is also a good lesson to Zanu-PF on what it should have done to Mugabe at least twenty years ago when it became all too apparent that he was leading the country astray. There have been many opportunities for Zanu-PF to tell Mugabe to go but there has been very few if any who have launched a serious leadership challenge to Mugabe. Joshua Nkomo did in the early years of independence and he was mercilessly crushed, Edgar Tekere tried in the late eighties and he was buried. More recently Simba Makoni threw his hat into the ring but his motives were as questionable as his efforts were feeble.

The greater tragedy has been that for every single voice of dissent a dozen sycophantic voices have emerged to praise and fawn on Mugabe’s leadership greatness. And the tragic effect of the failure to unseat Mugabe is now all too plain to see - except perhaps by the outgoing President Mbeki who saw no evil and heard no evil in Mr Robert Mugabe. Mr Mbeki will not be missed by the people of Zimbabwe.