Sustainable key ideas of resuscitating Zim economy

Sustainable key ideas of resuscitating Zim economy
Published: 10 October 2018 (110 Views)
There is a huge gap between demand and supply. Our economy mainly survive on borrowing and imports. We have imports more than exports and therefore our balance of payments are in red. Zimbabweans must depart from a culture of panic, gossip and rumour mongering. Economy is run on concepts and ideas. Misconception has led to market panic and rendering the economy dysfunctional. There are a good number of fundamental ideas of how we can avert economic crisis in Zimbabwe if proper measures are put in place. It was a good idea for President Mnangagwa to put in place a cabinet comprising technocrats and new faces on the bloc to improve the political and economic face. There are basic fundamental key economic reforms that must be put in place to restore confidence in the economic sector. We need to understand that the markets are reacting from politics and economy. One thing we can't get away with is confidence and roles of market and its impact on our economy. Put a proper cabinet is not enough, one needs to go an extra mile to put proper measures which can deal with the ailing economy. I can assure you once the Government follows this document, we give them two weeks, and our economy will be flourishing. Remember there are major political and economic developments emerging from a contested election result. Basically these are repercussions. The economy require simply but careful rules on how to mend our ailing economy.

Restoration of Confidence

My assumption is the markets are reacting to certain situations which are either politically or economically and its normal in any transitional mechanism. Given the context that we had a transition most likely it is normal for any market to react. They adopt what is called "WAIT AND SEE APPROACH". Most investors are seated on the fence, watching closely the economic and political developments in Zimbabwe. What the Government needs to do is to build confidence within and outside the system. There are certain measures which can aid to bring confidence. I thought the Minister of Finance was supposed to have started with economic consultative forums with academics, policy makers, suppliers, bankers, business community and by doing so you will be building confidence. What exactly do people want? The Government must depart from the culture of imposing ideas and policies on citizens because mainly this will backfire and there will be a market shrink. The biggest fundamental question is that how do we resolve the market problem? I suggest that before the Minister of Finance makes policy pronunciation it is ideal to consult. Policy shifts are dangerous to the ailing economy and this has negative impacts towards our fragile condition. The major climb down by the Minister of Finance over the 2% tax threshold was a sign of policy inconsistency which can be a bad sign of governance.

Cutting Expenditure

We must adopt the "eat what you kill concept". This idea of over spending has become our culture which has led to problems mainly in the critical sectors of the economy. As we speak the Government is surviving on borrowing and we have wide budget deficit and arrears in our expenditure. My suggestion is President Mnangagwa must do away with deputy ministers. What do we need the deputy ministers for? We have an ailing economy and there is need for us to eat what we kill. Let us drink from our own well. Deputy Ministers are not necessary and the President can relieve them off their duties. We have permanent secretaries and principal directors in every ministry and those can be in charge of certain functions in place. Deputy Ministers are a replica of same duties which the minister can perform. Foreign trips should be limited. There must be strict budget, as most senior Government officials use foreign trips to line up their pockets using travel allowances. Size of delegates must be cut to reduce travel costs incurred by delegates.

Foreign and Local Debt

Our country is largely depending on debts. We have accumulated so many debts mainly because we are not producing anything. I think the first task for the Minister of Finance to announce the actual debt we have as a certain and how the money and resources were disbursed. How did we arrive on such debts? What is the actual debt clearance plan for our nation? How are we going to repay our creditors? You must also put it into consideration that international partners and lenders want a clearance debt plan. We must do away with the culture of borrowing. We have vast of minerals in this country and we must come up with plans and resolutions on how to have a survival plan. Our local and foreign debt stands at 13 billion. We have so many creditors that we are owing and how are we going to repay those loans? There is no way the IMF and the World Bank will offer us new loans until we have a clear debt plan. We have serious debt problems which are never made public, and how do we restore confidence in our economy?

Chinese Deals

Personally I suggest Chinese deals without a specific economic plan that will benefit the majority will not have an economic benefit. During Mugabe's tenure, he signed several mega deals which were in vain. We must depart from a culture of papers and fulfil the implementation part. How many deals have we signed as a nation and were are the benefits of those deals? What is Zimbabwe getting from such raw deals? Let's hope we are not mortgaging our nation to China. The biggest challenge with Chinese deals is that such deals comes in the form of resources and equipment whereas Zimbabwe needs at least 5 billion to kick start the economy. We have a liquidity crunch problem. What we need for now is money to ease cash shortage. I would rather suggest that all public deals which involves tax payer's money goes through public finance bill or an act of parliament. Before any borrowing, this must go through legislative forum as a legal process to provide transparency as a key economic reform. Before any major deals are put in place, there is need for proper consultation through sound policy makers, economists, academics, researchers and politicians so that there is a clear policy and legal framework to avoid dubious investors who have duped our country before.

Sound Economic Development Policy

There is need for a sound development policy for Zimbabwe which must involve all stakeholders such policy makers, Government, Academics and other key stakeholders so that there is a proper framework to bail out Zimbabwe from the economic mess. We don't have a clear economic plan and this has created so many problems for us. In fact, our development plan must go through the parliament before an official launch. The plan must include all the critical sectors of the economy. We have five critical sectors of the economy such as mining, tourism, infrastructure development, agriculture and industrialisation. The economic development policy must involve those 5 key sectors. There is need for an official launch after proper consultation. In fact the launch must then involve diplomats, heads of Government, potential investors and business community. We must develop a culture of inclusiveness, and allow all key players and stakeholders to participate in economic decisions.

Tinashe Eric Muzamhindo writes in his personal capacity as an academic and he is studying Doctor of Philosophy in Development Studies at Women University of Africa. He can be contacted at tinamuzala@gmail.com

- Tinashe Eric Muzamhindo

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