In a move that will surprise precisely no one who has been watching the slow-motion train wreck of Zimbabwean governance, the country’s parliament has passed a bill that extends the already considerable powers of President Emmerson Mnangagwa. This legislative power grab comes at the worst possible moment: the Commonwealth is dangling the threat of suspension over Harare like a Damocles sword. But then, timing has never been Zimbabwe’s strong suit.
Let’s get the numbers straight. Zimbabwe’s economy is a house of cards built on a swamp. Inflation is officially running at over 175%, though anyone buying a loaf of bread knows the real figure is much higher. The parallel market premium for foreign currency is something like 50%, which tells you all you need to know about confidence in the central bank’s ability to manage the currency. Capital flight is endemic. The only thing growing faster than the money supply is the list of foreign investors who have written off Zimbabwe as a bad bet.
Into this fiscal hurricane, Mnangagwa’s ZANU-PF party has decided that what the country really needs is more power concentrated in the presidency. The new bill does away with presidential term limits (how novel) and gives the executive unchecked control over the appointment of judges and electoral commissioners. In other words, it removes the last flimsy checks on executive power. This is not reform. This is autocracy dressed up in parliamentary procedure.
Now, enter the Commonwealth. That bloated, toothless club of former British colonies has been muttering about Zimbabwe’s broken promises since 2003, when Robert Mugabe pulled the country out after being suspended. Mnangagwa, to give him some credit, has been courting a return for years, dangling the promise of free and fair elections and respect for the rule of law. But the window dressing is coming off. The Commonwealth Ministerial Action Group has fired a warning shot: any further erosion of democratic standards will trigger an automatic suspension. This is not a threat to be taken lightly. Suspension would effectively scupper any chance Zimbabwe has of accessing international capital markets or securing debt relief. The country already owes $14 billion to foreign creditors. Another political crisis could push it into default.
But let’s be brutally honest about what this means for the man on the street in Harare. The average Zimbabwean cares less about Commonwealth politics and more about whether the currency in their pocket will buy a loaf of bread tomorrow. The extension of presidential power will do nothing to fix the broken power grid, the collapsed healthcare system, or the exodus of skilled workers to South Africa and the United Kingdom. It is a classic case of elite enrichment disguised as political stability. The ruling party will say they are “protecting sovereignty” or “streamlining governance”. In reality, they are kicking the can down the road, hoping that the international community will eventually get bored and look the other way.
Market reaction? Spare a thought for the Zimbabwean dollar. The ZWL has lost 80% of its value against the US dollar this year alone. This new bill is just another piece of bad news for anyone foolish enough to hold local currency. The yield on Zimbabwe’s Eurobonds (if you can find a willing buyer) would be astronomical, reflecting a risk premium that screams “distressed”. Foreign direct investment? It is a trickle, and it is all going into mining, where the returns can justify the political risk.
The Commonwealth threat is real, but it is also a double-edged sword. A suspension would be a badge of shame for Mnangagwa, but might also give him a domestic propaganda boost: the West interfering again. Yet, with inflation eating away at pensions and salaries, the population is not in a forgiving mood. The president is playing a dangerous game, betting that the Commonwealth will blink first. Given the organisation’s track record of indecision and waning relevance, he might be right. But if they do act, Zimbabwe’s already dim economic prospects will darken further.
Here is the bottom line: The extension of presidential power in Zimbabwe is a backdoor coup, timed to coincide with a plea for Commonwealth readmission. It is a political hedge that will either pay off handsomely for Mnangagwa or crater the economy. For investors, the advice is simple: stay out. The risk of capital controls, sovereign default, or outright expropriation is too high. The Commonwealth’s threat is a warning shot, but the markets have already priced in a very high probability of continued decline. Zimbabwe is a case study in how bad governance destroys value. And in this case, the value being destroyed is the future of 16 million citizens.