'Mugabe, Zanu PF clueless on economy'

HARARE - Former Finance minister Tendai Biti says President Robert Mugabe needs to consult outside his government and implement economic reforms to avoid a total collapse of the country’s economy. He speaks with senior assistant editor Guthrie Munyuki and below are the excerpts of the interview.

Q: The economy appears to have entered a cul de sac. What are the urgent things that need to be done to put the economy back on track?

A: It’s not a cul de sac because at least in a cul de sac, it’s a road that is going nowhere. Here there is no road. The wheels have just come off. We have hit a big pothole and the car has totally disappeared.

I think that the biggest challenge which we face is the crisis of leadership. Unfortunately those that are in the cockpit are absolutely clueless. But not only that, they don’t have love for the people because if they had love for the people they would need to understand and appreciate that we have failed and therefore let’s do the right thing, consult and move forward.

The market is aware that they are clueless which is why you see this structural lack of confidence which is disproportionate to the economic fundamentals.

Yet Zimbabwe, the figures are not good but the lack of confidence is disproportionate to the fundamentals.

So if you look at the question of capital flights from Zimbabwe, the near collapse of our stock market particularly after the election and if you look at the company closures, retrenchments in a very short period of time — that is reflective of lack of confidence and confidence is leadership.

We have got leaders who don’t inspire hope. We have got leaders who don’t inspire any confidence and we have got leaders who don’t generate any faith. So the market reacts and reacts viciously. That is where we are at the present moment.

Q: You blame lack of good leadership but between now and 2018 the Zanu PF government will be in charge, so what needs to be done to rescue the economy?

A: I think that they need an urgent economic programme. We had the Short Term Emergency Recovery Programme (STERP) in 2009. So they probably need a STERP 3 which is an economic document not a political statement that the ZimAsset is. That (economic) document must address the following,

- Firstly, the issue of our politics because politics is putting a premium on the economy. And that politics must address the issue of the stolen and rigged election and how do you restore legitimacy.

Obviously the answer is that you need an election. But constitutionally, the election is in 2018 so in my submission you don’t need a GNU but you need a construction that recognises that these guys have failed and that also respects the issues of legitimacy; whether you call it a caretaker government or a technocratic government, I don’t care.

But the fact of the matter is that you need to balance the questions of inability to govern and manage the economy and the question of legitimacy.

- Secondly, you need to deal with the issue of legitimacy in the broad international sense that you have got a team that is not capable of engagement with others.

The Zanu PF regime does not have international legitimacy which is why for instance you have got the current debacle of our failure to attend the European Union-Africa summit simply because a visa was not issued to someone. And that’s catastrophic.

That’s impeachable dereliction of duty because that was such an important summit that would have helped Zimbabwe EDF 11 discussions with the European Union and with a little bit of dexterity we could have gotten close to 200 million euros from that summit. So it’s very sad that we fluffed those negotiations because of our huge worthless egos. That is regrettable. So international legitimacy is required.

- Thirdly, we have to complete the Staff Monitored Programme (SMP) and the Zaadds (Zimbabwe Accelerated and Arrears Debt and Development Strategy) we developed at the ministry of finance. There are huge sieves of money sitting at the World Bank and African Development Bank which we cannot access.

And the pre-condition of that is the SMP. We have got a serious infrastructural deficit in this country which requires $15 billion to 2020 and this economy cannot generate those resources. So we just have to normalise our relationships with the IFIs but the pre-condition for that is the SMP.

- Four, we have to create aggregate demand in this economy. Aggregate demand has collapsed, industry has collapsed and the economy has been informalised. So this country urgently needs a stimulus of at least $4 billion that has to go to industry.

Once we resuscitate our companies it means we are resuscitating other things — we are resuscitating aggregate demand and we are also resuscitating savings. If our savings can reach 40-50 percent of GDP it means other people can borrow and start businesses. The informal sector can become formalised and so forth.

- Five, the land question. Fifteen million hectares of land was taken under the land reform programme. That was added to the 19 million hectares of land that was peasant communal land.

Now this 15 million hectares of land that was productive, was productive because there was title. So land was a commodity with use value and exchange value.

The unfortunate thing about the land reform programme is that we have now converted land which had both use value and exchange value into land with just use value. But as long as you have land with use value without exchange value it has no value at all. So we have killed a seriously-productive asset.

Zanu PF must comply with the constitution and give some kind of title to anyone with land in Zimbabwe at the moment so that is can be hypothecatable. There is no farmer who can farm seriously out of his pocket. It doesn’t happen!

It’s subsistence farming.

You can only farm because there is financial backing that comes from a banking institution.

So the land question must be resolved by complying with the constitution and ensuring that farming land in Zimbabwe has got some form of title.

I don’t care whether it is a lease agreement or a title deed but a farmer must have security of tenure and a farmer must have the right to own that asset in the extent of being able to hypothecate at that.

If we don’t do that, we continue with a limping agricultural sector where yields per hectare in model A1 farming and communal lands are now below 70 kilogrammes a hectare and good commercial farmers are three tonnes to five tonnes per hectare, which is subsistence.

- Six, Not only must we resolve the political legal aspects of agriculture but we must define an agricultural model in Zimbabwe. The Zanu PF regime has failed to do that. The agriculture model must recognise the following;

- That farming is a business and therefore a business model must be sculptured.

- The business model that I propose must recognise that real farming comes out of the beneficiation of farming products. So it’s not enough to farm tobacco when 90 percent of it is being exported outside Zimbabwe.

The Rothmans of this world, the BATs of this world and the Adam Molais of this world must process that tobacco here. We must process our soya beans here into value addition.

So instead of the land acting on its own we must use the land as a vehicle for the agro-industrial transformation of this country thereby eliminating the structural disease of this country which is the dual enclave economy. When you recognise that the concept of agriculture is beneficiation then you appreciate the importance of the agro-industry transformation of this country.

Q: So the problems are multi-faceted?

A: The problems are so multi-faceted. The thing is we have 34 years of independence but we have been in a permanent depression, bar the first 10 years of independence and probably the five years of the GNU.

If you study our economy back since 1890 you see that we have been in a permanent depression, spiked and interrupted by small periods of growth. For instance 1965- 1973, 1980-1986, 2009-2011. So the natural DNA of this economy is permanent depression. So because of that we have had stunted growth.

This economy was the second largest in the Sadc region in 1980 (but) it’s now number three from the bottom. So in real terms we are 30 years behind other countries of comparable resources in terms of human resource and in terms of mineral resource.

So we have to catch up to the 30 years and then we have to sprint. So this country needs leaders who are cheetahs not the hyenas and crocodiles of Zanu PF.

Comments (15)

Quite some reasonable comments there by Tendai Luxton Biti. With a bit of fine-tuning of character and some further advice from professionals across the whole spectrum of society, Biti can turn himself into presidential material. The chap, unlike Bob and Morgan, has some functioning brain cells !

Portiphar Mudumbwi - 7 April 2014

"It's not a cul de sac because at least in a cul de sac, it's a road that is going nowhere. Here there is no road. The wheels have just come off. We have hit a big pothole and the car has totally disappeared." - If this was not serious it will be comedy gold.

Lt General - 7 April 2014

Well said Biti. Continue making some intelligent contributions while some "leaders" are making fools of themselves. The voters are watching and if you play your cards well you will be chauffered in the "Zim 1" Mercedes Benz around this time in 2018. Keep it up, young man.

Chipo Zigora - 7 April 2014

Zim needs competent young people not praise singers.People with ideas, vision foresight and who have no problem working whites to turn this country around.People who put their country first and their pockets last.

Roland Ncube - 7 April 2014

Yeah ndokufunga uku rambai murimugwara VaBiti musateredzere vamwe venyu vakurasika eg u know who

protestor - 7 April 2014

Biti akashama muromo asina hasha anobudisa sensible speech. Kana aine hasha anorasa muromo sekuti ma elections haana kubiridzirwa. My advice is that Biti must harness his wisdom with Tsvangirai if they are to lead us to promised land

Gweje - 8 April 2014

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GALLERYCARTRIDGES - 8 April 2014

Ndada Biti unemongo iwe

Chidondova - 8 April 2014

ZanuPF is our MH370. To find a solution you need to search a bottle of coke in an area of 2500square meters.

Maita Manyuka - 8 April 2014

Biti is typical presidential advisor material .You got the brains and u are very pragmatic what is left is to know the Zimbwean political landscape well usazoite sa Simba Makoni akarasiswa .Just keep youer eyes on the ball u have what it takes us to the promised land.

aluta continua - 8 April 2014

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Pumps - 8 April 2014

Well said Biti. Hope ZPF ministers are going to read your analysis and reluctantly copy one or two things. As of now you have to seriously think about uniting with Tsvangirai (Chikwezvavanhu) kuti may b uzoitawo president weZim in future. Kopa Prof rocket scientist zvaari kuita kuZPF.

John Tan - 8 April 2014

I have always been of the opinion that Biti and Tsvangirai form a Great team. One brings in the brains and the other-charisma and popularity.

Dr Know - 8 April 2014

Mugabe and his ZANU PF people all practice politics dzemusango(jungle politics which goes , "survival of the fittest "). These men were all once "vafudzi vemombe kuma ruzevha ekumusha kwavo, (meaning these men were once cow herders in their villages, then they were sent to school to learn subjects , but their cow herder mentality never left them, they are still cowherders at heart and they practice the law of the jungle which is , "survival of the fittest," because all they are doing in the government is to loot state funds and lining their pockets with state funds, while poor Zimbabweans are suffering in abject poverty. These ZANU PF men eat ten course meals a day, while the ordinary Zimbabweans go hungry. These ZANU PF men and women are corrupt to the core , and the word "economy", is a word lacking in their vocabullary. The reason they are in power has nothing to do with the economy , they are in power for themselves not for the country. They are in power to loot state funds so that they eat ten course meals a day. If you ask ZANU PF MPs , "What does economy mean?" They will reply, " Who is Economy ? Where does he/she live? Is he/she a ZANU PF party member or is he/she from the opposition party?" These men have no clue what economy means because they are cowherders at heart ,even if they went to school to learn subjects and then they were given seats in parliament , these former cowherders will always be clueless on how to run the country successfully. Zimbabwe is too big for them to have a clue on how to run the country successfully. Ngava dzokere kumisha kwavo vano fudza mombe dzavo , vasiyane ne zve kutonga nyika ye Zimbabwe, havagone, vatadza ku run the country.

Nhunzi - 8 April 2014

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