In July, a series of violent anti-government protests erupted in Zimbabwe. Riots broke out after import restrictions were imposed on a number of basic goods, followed by street protest in Harare against forced bribe payments claimed by security forces at road blocks. Also, civil servants launched a strike after their wage payments were postponed once more, this time including security forces’ wages. On top of this, war veterans who were the backbone of Mugabe’s Zanu-PF party since 1980, announced that they withdrew their support for the President and urged him to step down. This was answered by a rather threatening speech of Mugabe stating that ‘he will deal firmly with his detractors’.
Impact on country risk
President Mugabe is facing growing opposition, even inside his own party, over the aggravating socioeconomic hardship in the country and his drive for seeking re-elections in 2018 (when he will be 94) or the appointment of his wife Grace as presidential successor. Severe foreign exchange scarcity and food insecurity together with high living costs and soaring unemployment plunged the country into a deep crisis once again. The public wage bill amounts to up to 80% of the government’s cash-strapped budget, causing payment delays. In case security forces are subject to wage delays more frequently, the risk for violent outbreaks will intensify. Resentment over the succession issue adds up to socioeconomic grievances and will continue to spur demonstrations and strikes in the near term. It remains to be seen whether support for Mugabe will ever crumble down to that level where the traditionally loyal and politicised military turns against him. In any case, the risk for escalating unrest or a disorderly regime change has increased. In this context, Credendo Group remains off cover for short term and MLT transactions on Zimbabwe. Analyst: Louise Van Cauwenbergh, email@example.com