Why Chinamasa must go

HARARE - Finance minister Patrick Chinamasa’s lack of depth on economic issues has exposed him as the weakest link in reviving the country’s troubled economy.

Notwithstanding his prowess in the legal fraternity, the lawyer-cum-politician lacks the vital economics know-how to navigate the murky waters of macro and micro economics necessary to steer this country forward.

Unlike his predecessor Tendai Biti — also a lawyer by profession — who stabilised the economy when he took office in 2009 and brought inflation to manageable levels, Chinamasa is presiding over an economy that risks sliding into deflation.

Despite Zimbabwe’s year-on-year inflation quickening by eight basis points from 0,33 percent in December 2013 to settle at 0,41 percent in January 2014, the marginal increase in January, the inflation rate trend is likely to revert to a downward trajectory as aggregate demand continues to weaken.

According to the Consumer Council of Zimbabwe (CCZ), the consumer basket for a family of six decreased by 0,29 percent to $559,93 in February 2014.

Although he faces the unenviable task of proffering solutions amid a desperate need for an economic bail out, Chinamasa’s maiden budgetary statement last December failed to breathe life into the faltering economy.

The 2014 Budget statement has, at best, been described by economic experts as just a statement — with no clear direction the economy is expected to take.

With the country staring a massive de-industrialisation, it was expected the Finance ministry would come up with measures to stimulate production by either increasing tariffs on selected imported products or injecting fresh capital into industry.

Instead of channelling the little resources the country has to critical areas such as agriculture, manufacturing, mining and education, in his wisdom (or lack of it), Chinamasa poured much of Zimbabwe’s scarce revenue into state security and defence.

Companies are closing down daily and more are expected to shut down this year due to lack of cheap credit lines and declining capacity utilisation, yet no word has come from the minister — in a yet clear example of how clueless he is in steadying the sinking ship.

Zimbabwe’s economic growth potential continues to reel under intense pressure with indications that retrenchment numbers are continuing to soar.

Last year alone, approximately 9 617 jobs were lost, according to the Zimbabwe Congress of Trade Unions.

Earlier statistics from the Employers Confederation of Zimbabwe show that job losses  amounted to 3 060. The Retrenchment Board cited low capacity utilisation, low product demand, obsolete machinery susceptible to frequent breakdowns, lack of working capital and raw materials as some of the factors triggering retrenchments.

Despite all these indicators of economic meltdown, Chinamasa has failed to attract a single cent either from donors, international money lenders or other countries.

In December, he returned home empty-handed from Washington after being denied funding by the International Monetary Fund (IMF), whose team is in Zimbabwe this week to review the government’s economic policies.

Early this year, his trip to China also yielded nothing.

Chinamasa is supposed to be the face of economic prosperity but analysts argue that he cannot even run a rural bottle store, let alone an economy on its knees like Zimbabwe’s.

The prevailing economic environment is not necessarily conducive for doing business and Chinamasa’s shortcomings are making it worse.

The Mugabe-led administration has over the past 33 years presided over the socio-political economic malaise that has besieged the country.

Civil servants, who make the bulk of the country’s formally-employed staff, continue to live in abject poverty after Chinamasa failed to avail funds to award them a salary increment.

Actually, they were awarded an increment only on their payslips but the new salaries are not reflecting in their bank accounts.

Comments (1)

Where in the world do you have a New Finance Minister taking over and you have 700 companies going bust than in Zimbabwe and the Minister is praised for a doing a good job.This shows the leadership is out of its depth and the pilot is sleeping in the cockpit.Mugabe spends most of his time sleeping and eating cake,yoghurt,ice cream and sweets a sign of old age.All Psychogeriatrics like sweet things especially towards end of life.

Guranyanga - 16 March 2014

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