Mnangagwa will be asked to make promises that he can’t keep. They will ask him to relax labour laws, to make it even easier than it already is for big corporations to fire workers. He needs to decide where to put the marker to balance all this out.
Already, in his meeting with IMF’s Lagarde, he was told to take tough austerity measures such as cutting public sector wages. How deeply can he make such cuts?
They even want him to reduce farm subsidies, which would mean cutting back on Command Agriculture. But that’s his centrepiece policy, the one that makes him excitedly sit up in every interview and passionately reel off figures and statistics.
The IMF even wants him to compensate dispossessed white farmers. It is an impractical demand, showing once again how detached the IMF can get from the local realities of the economies in which it gets involved.
Investors will demand concessions that Mnangagwa cannot afford to give.
And this is where he will need to be smart. And doing that begins right there in his office. He has many good civil servants around him, but many others are rusty relics from the Mugabe era.
Those civil servants have been traditionally poor at negotiating with foreign investors. It may be worse now that they have to deal with a section of prospective investors that they never had to deal with before. Even more concerning, they will be negotiating under pressure to produce immediate results, given this inane obsession with the 100-day targets.
Desperate people negotiate bad deals. Worse so, when they already are bad negotiators.
Anderson Chiraya, an official in the Office of the President and Cabinet, revealed last year why government always fails when negotiating big deals: “During negotiating for such deals, some partners came with a barrage of lawyers, while on our part, there may be a minister and the permanent secretary only and if they do not understand, we get a raw deal. Yet the other parties come with lawyers and people that are well versed.”
In May 2014, Zimbabwe sent some of its officials to a World Bank seminar on how to negotiate deals with investors. It is time to put those lessons to some use.
In the 2013 “Africa Progress Report,” former UN Secretary-General Kofi Annan said poor negotiation of contracts was one of the reasons Africa was not benefitting enough from its resources. A comparison of the selling price of five Congolese mining assets with an independent assessment of their value uncovered a difference of over $1 billion.
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