Govt clueless, as economy burns

HARARE - For most Zimbabweans, these are trying times.

The country has entered a period of deflation, salaries for those lucky to be still employed are depressed amid a tightening liquidity crisis and basic goods remain priced out of the reach of many.

But even as the economy shows signs of imploding, the country is riveted with stunning revelations in the media of managers of State-owned firms earning millions of dollars in pay while the economy stutters.

Insiders say the Salarygate stories have been allowed to run to divert attention from government’s appalling handling of the economy.

Critics say President Robert Mugabe, who won last year’s elections  after promising 2,2 million jobs, continues to fiddle while the economy is burning.

Figures released last week by the Zimbabwe Statistical Agency show that the economy is sliding towards deflation, a situation that could see overall output and competitiveness of industry being affected, leading to a further decline in employment levels.

Charles Msipa, the Confederation of Zimbabwe Industries (CZI) president, said the manufacturing industry was in the “intensive care unit” with most companies in the country operating below 40 percent of capacity utilisation as a result of high finance costs, electricity and water shortages, ageing equipment and stiff competition from cheap imports.

As part of efforts to halt the economic decline, government last year launched the ambitious economic blueprint, the Zimbabwe Agenda for Sustainable Socio-Economic Transformation (Zim Asset).

However, what the Zanu PF-led government had sold as a panacea for Zimbabwe’s economic depression is failing to provide the required cure, creating a deep sense of disillusionment among business leaders and ordinary citizens.

University of Zimbabwe economics lecturer Tony Hawkins says without a financial bailout, Zimbabwe’s economy will continue to slide.

“Without an International Monetary Fund (IMF) deal leading to eventual debt forgiveness, economic growth will continue to be hamstrung, not by economic sanctions, as ministers and many business people claim, but by an unsustainable debt burden,” Hawkins told the Daily News.

“Just as something will have to give politically — the current ‘factioneering’ will further undermine governance, vividly illustrated by Salarygate — so too economically.”

Hawkins asserts that if the Chinese do not come to the party soon and in a big way, the current economic malaise will deepen.

“Growth at 3,4 percent in 2013 was the slowest since dollarisation five years ago,” he said.

“Unemployment, already well over 50 percent of the workforce, will rise inexorably, the brain drain will intensify and living standards fall further.

“The difficult economic decisions that should have been made over the past five years are not going to go away. Nor are they likely to be taken while ministers and officials, in fear of losing their jobs, squabble over the succession. It is time to draw a line in the sand and move on.”

Market experts have also warned that unless government clarifies its indigenisation policies, foreign investment — itself a vital cog in economic revival — will continue skirting the country in favour of friendly investment destinations.

The controversial law, which was enacted in 2010, forces foreign-owned firms to cede 51 percent to locals.

“Some of the country’s legislation needs to be revamped to allow for foreign direct investment,” said George Guvamatanga, the president of the Bankers’ Association of Zimbabwe.

“For instance, there is need to clarify the indigenisation policy and realign it with other legislation.”

Guvamatanga noted that the indigenisation regulations were in conflict with the Zimbabwe Stock Exchange (ZSE) regulations on foreign investors.

“There is no alignment of ZSE foreign investment requirements and indigenisation regulations,” he said.

“For instance, the Indigenisation law doesn’t provide adequate clarity on someone who wants to bring investment in Zimbabwe by buying shares on a ZSE-listed company and also wants to invest in an unlisted company.

“Capital by its nature requires clarity.”

The Zimbabwe National Chamber of Commerce says robust measures to attract money into the economy must be explored.

“Steps in reforming the investment environment, reducing the country risk rating and doing business reforms should be a priority,” said a senior official with ZNCC.

With the economic environment slowly receding to the 2008 levels, infrastructure and social services delivery in the country are deteriorating at a fast pace.

Despite all the signs pointing to a failing economy, Mugabe has remained mum, a development that has been described by analysts as an indication of government’s  cluelessness in turning around the economy.

This week, opposition leader Morgan Tsvangirai implored Mugabe, under whom he served as prime minister in a fractious coalition government since the disputed and bloody elections in 2008, to swallow his pride and acknowledge the deepening economic crisis.

“The economic crisis is a symptom of the political crisis of legitimacy because that is the one that undermines the confidence in the economy,” Tsvangirai told the Daily News.

“You know, for the last five years, the economy was stabilised because of confidence in the economy due to political stability.

“Now, because if the crisis of legitimacy, as a result of a rigged election, already, it’s a crisis that has undermined economic confidence to the extent that all sectors have now been affected. There is a legitimacy crisis,” he said.

Nonetheless, the Zanu PF government remains adamant that the latest economic blueprint will perform miracles and drive economic growth.

Comments (20)

So called 'the opposition' because of the stolen elections; you get into this disarray mode at the 'wrongest' of all times. Zanu is happy that there is no-one to challenge them at this crucial moment. Instead of remaining united and keeping yours eyes on the ball, you are busy fighting for positions. It was abundantly clear from the start that this rigging would 'come home to roost' one day. You should have been busy organizing people to fight for better living. Zimbabweans do not need more political parties at the moment. We need food on the table and livable lives.

tomasi ndofeni tohwi - 21 March 2014

Wedu ndi Morgen. Zanu muchamama chete. Stealing ''erection'' , tongai tione. Nesu ma Zimbo we are so stupid, kungwarira paduzvi senzunzi chaiko,, how can we be fooled by mugabe with a cap and a torch??? Cook your torches

figo - 21 March 2014

These people are surviving because of the ignorance of the marjority in Zimbabwe. I realy do not know what the people need to be told for them to see that with Zanu Pf there is not going to be a change in the country. Zanu PF has done its part and its time they leave the stage for others. people were fooled that the opposition is promoting sanctions. People should know that the opposition have no influence on these sanctions and even if they say anything there will be no change as long as Zanu PF is rulling Zanu PF needs to admit that they stole the elections won by the opposition in 2008 and commited crimes against humanity by butchering people in the run-up to the run-off in 2008. They removed the confidence people had of the country when they invaded industries and land.Zanu Pf cannot get away from power on their own and people have to vote to get them off. If people are not prepared to see the word of reason we are going to remain like this untill heavens come. The enemy is not Britain or America. The enrmy is Zanu PF who is destroying our lives. Now we have to live with this hardship for the next five years because we were given a chance and we played with it.. This is a lesson for the future

Zvigubhu Ngondongondo - 21 March 2014

@Figo-If you weren't in the know, the peoples' wishes were not reflected in 2013 elections. The alternative(MDC) we were so dependant on is on a warpath with itself. I'm beginning to be tempted Biti might have a point when he says we need a United Democratic Party.

Dr Know - 21 March 2014

Zanu for lyfe things will change

tafadzwa - 21 March 2014

They daydream and bark day in and out without anything tangible to offer. They spend a lot of time in those endless meeting deliberating on what?? Wake up and smell the coffee, the ship is sinking!!

Matingwindi - 21 March 2014

The Current situation where ZANU is attacking the high earners is well calculated to win it support from the majority. That majority is out of jobs. They are out of jobs not because of big salary earners, but because of the ills brought to the economy by Zanu's policies. So the majority are loving Zanu for crucifying the big earners and yet are blind to the mess they are in because of the same guy they admire! Don't get me wrong, big salary earners must be stopped and also Zanu must be stopped.

Mwalimu - 21 March 2014

Prof Hawkins knows that this economy was punished by the WEST becoz of the land issue! The IMF /World BANK wont bail out Zim becoz of ZEDERA . Other finanacial institutions will not dare assist Zim in fear of being marked by IMF and the US authorities! It is not the indigenization law that is keeping out investors but the sanctions, which is a major input in the country`s risk! Investors can come in with less than 40% holding provided they are happy with the mix of local shareholders! To me the lack of capital and business acumen among the black partners are the major factors keeping out investors! Blacks have the wish and business ideas but they dont have capital . Few have the attractive business acumen on which foreign investors would start building relationships if they had capital as 51% shareholders! So please accept that sanctions are major factor, even in getting capital and credit lines for our economy!

Cde Mzvinavhu(Prof) - 21 March 2014

Prof Hawkins knows that this economy was punished by the WEST becoz of the land issue! The IMF /World BANK wont bail out Zim becoz of ZEDERA . Other finanacial institutions will not dare assist Zim in fear of being marked by IMF and the US authorities! It is not the indigenization law that is keeping out investors but the sanctions, which is a major input in the country`s risk! Investors can come in with less than 40% holding provided they are happy with the mix of local shareholders! To me the lack of capital and business acumen among the black partners are the major factors keeping out investors! Blacks have the wish and business ideas but they dont have capital . Few have the attractive business acumen on which foreign investors would start building relationships if they had capital as 51% shareholders! So please accept that sanctions are major factor, even in getting capital and credit lines for our economy!

Cde Mzvinavhu(Prof) - 21 March 2014

As long as Mugabe is around forget abt economic success. He doesn't listen to anyone. Not even good advice. Ane nharo dzisina musoro mdhara uyu. If that wasn't the case why is it that he has run short of friends that can assist him financially in this whole wide world? We cannot always lament over frosty relations with the west. We sound as if the world is made up of Zimb and western countries only such that we have no one to turn to in times of need. It looks like the rest of the world actually agrees with the west, unfortunately in silence.

Magura - 21 March 2014

Some of us in Zimbabwe{from Midlands and MaNdebeleland}have a clear foresight.We rejected this DEVIL way back in 1980 because we could smell trouble way ahead,but some of our brothers from several provinces clung to the DEVIL's dirty toes not knowing that the same toes they kissed will tremple them in not so long time.I admire the people of MaNdebeleland and Midlands for believing in their belieif of NEVER to worship the DEVIL.I wonder if years could be reversed how many people would vote foe ZANUpf were it in 1980.Our future generations have been "murdered" by this REGIME so to speak.ASAZI MADODA KOLAMULA INKOSI.

zimzim - 21 March 2014

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CARTRIDGEGALLERY - 22 March 2014

We are craven cowards and deserve every pile of shit Mugabe and his many obedient sons throw our way.Hanzi takadzidza but here we are being screwed day in and day out by Zanu pf.And please leave God and the West in this.That only goes to show how we seem to fail to accept the continuing tragedy of our situation and take this pitiful solace in blaming everyone except ourselves.

MASCARA - 22 March 2014

ZANU won the elections last year. Zve rigging is fantasy of the losers. Hanzi ballot paper raichinja ne invisible ink? LOL! The issue of tongai tione supposes that only ZANU,its leaders and supporters suffer yet when hunger comes it does not ask for a party card re MDC...We need to work together to build a better Zimbabwe. Mugabe is mortal and one day he will not be there asi isu we will remain and if we are stupid we will remain divided long after Mugabe&Tsvangirayi are gone. Now is the time kuti tose tiite put NATIONAL interest first. If it is lifting of sanctions,appealing for aid or even coming up with policies it must be done collectively. I don't mean another GNU but one does not need to be a Minister/even MP/Councillor to contribute to national debate/policy. This 'glee' yekuti ZANU is 'failing' the economy is selfish and short sighted....When Zimbabwe fails it will be all of us as ZImbabweans who will have failed

we - 22 March 2014

I will agree with most that ZANU has failed but I am appaled by the idea that we can expext better from anything led by Tsvangirayi...Until/unless the opposition forces in ZIm can show me better than Tsvangirayi I will vote ZANU-better the devil I know. Unfortunately many many Zimbos feel the way I do...ZANU did not need to rig people ini I stood in line for hours to vote for mugabe and ZANU Mine was a protest vote hoping these opposition guys would wake up, but instead hanzi Nikuv Nikuv and the few that understand how Tsvangirayi is now a liability say something they are beaten and expelled from MDC yacho. Someone mentioned how many of us would vote ZANU in 1980 knowing what we now know. My question is having learnt from our past with ZANU&Mugabe why are we so blind as to rush headlong into the same mistakes with Tsvangi&MDC-T???????

wezhira wezhara - 22 March 2014

Dear Zimbabweans, we are in a sad economic malaise as a result of poor judgements which has cost the future generations. Wrong choices of not electing right people at the right time, have emmersely contributed to the down fall of every sector. Until up to the time we collectively come together as a united people, the issues that concern us will never be resolved. We the electorate choose a mediocre leadership, with greedy self egocentric agrandizement, whose ambitions are not channelled to ameliorate the welfare of the poor. How many of the current political leaders are not filthy rich, but we continue retaining them to continue increasing the levels of poverty while their children fly beyond the riches. People are fools and have continued to be fooled through foolish means. Up to the time, we define our goals in totality, we shall die poor, and our future generations will inherit our blanders.

majikijela - 22 March 2014

to all zimbabweans,we must bear it mind that mdara havana basa neumwe munhu except iye pazvake nemunhuri yake.For instance,vakamuvhotera vacho parizvino vari kufawo nenzara .

Bonani - 23 March 2014

struggles of a struggle_so says MASIPULA SITHOLE.

DBZ wekwaZerere. - 23 March 2014

All these prophets and pastors proffering miracles and divine solutions to problems drowning many of us is an indication that we in Zim cannot fully accept our culpability in this mess we are wallowing in.People throw away genuine green backs to false prophets so that they can get non existent jobs and tremble when you tell them that it is we together with Mugabe who have raped and looted the bread basket into a basket case.Every Zimbo is a potential thief when given half a chance and people blaming it all on mugabe and company are hypocrites who cannot unpick those logs in their own eyes.

mascara - 24 March 2014

Zimbabweans, we should learn to be grown up and say the truth about our country, learn to analyse what to say and what not say. We are tired of this negative reporting no wonder cases of stress have found roots in our country. We have created enemies for ourselves through this negative reporting. Let's wait and see where this will take you to.

Mbada Murenje - 26 March 2014

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