Where to Zim?

HARARE - Zimbabwe must first resolve its leadership succession problem, implement austerity measures, effect policy consistency and rebrand itself if it is to revive the country’s ailing economy, experts warned yesterday.

The country’s economy has been backsliding since President Robert Mugabe and his ruling Zanu PF party’s disputed re-election last July, and is struggling to gather  momentum given the on-going chaos within commerce and industry, as well as the worsening budget cuts and a steadily rising jobless rate.

Earnings reports reveal a largely gloomy outlook as more companies are slipping into liquidation, a situation that is throwing thousands of people out of their jobs and pushing the unemployment rate close to 90 percent —  amid fears that the economy is sliding into a debilitating recession.

Economist Christopher Mugaga said yesterday that Zanu PF needed to resolve the party’s thorny leadership succession problems immediately if the government was to succeed in rebuilding confidence in the economy.

“As long as the political succession issue remains unsolved, it will be hard for the economy to move forward,” Mugaga said.

“There has to be confidence for any economy to grow and presently we don’t have  that.”

The party of liberation is currently embroiled in a succession dogfight that is pitting supporters of Vice President Joice Mujuru against those of Justice minister Emmerson Mnangagwa, who are said to  be vying to succeed the country’s 90-year-old leader, Mugabe.

Mugabe’s right hand man and minister of State in the President’s Office, Didymus Mutasa has also consistently plunged into the succession issue. 

Mugaga said another of the requirements for any economy to register  positive growth rates was the separation of party issues from  government business.

“Currently, we have Cabinet ministers announcing various party positions which contradict government’s stance and this brings confusion not only to the economy but to foreign investors as well,” explained Mugaga.

Kupukile Mlambo, the Reserve Bank of Zimbabwe (RBZ) deputy governor, recently  said Zimbabwe’s economy may slip into deep recession by 2015 if there is no fundamental policy shift.

“Our estimate at the RBZ is that growth will be negative next year if things continue as they are,” he warned.

“Last two months’ inflation has been negative and if it continues for the third month, we enter into deflation. The problem is, if this happens, we don’t have the instruments to come out of deflation.”

The RBZ deputy governor also noted that the country’s multi-billion dollar debt overhang needed to be addressed by entering the seemingly politically unpalatable Highly Indebted Poor Country (HIPC) initiative, which could grant the economy much-needed debt relief.

Eric Bloch, a Bulawayo-based independent economist, said government needed to speed up revision of the controversial Indigenisation Act, in a way that would assure investors.

“What government needs is constructive revision of the Indigenisation law, and they have to do so in a way that will make the country friendly to investors,” Bloch said.

“They do not have to embark on a climb-down,  but they just have to be clear on their position, respect property rights and everything else will fall into place.”

Another respected economist John Robertson also highlighted the need to scrap the Indigenisation policy which he said was solely responsible for chasing away droves of investors.

“How can anyone amend theft? What government is doing is that it is simply fine-tuning its theft mechanism. I say they must scrap the whole thing (Indigenisation), something wrong cannot be made right.

“They should work on a new policy, but this time with investor input,” Robertson said.

Bloch said government must also implement substantial changes to its tax laws and rationalise labour laws.

“All these things are at the moment repulsive to Foreign Direct Investment. As government, they need to ensure rates and allowances are consistent with those in the region,” the economist said.

Issis Mwale, another economist, said government must solve its international relations problems.

“At the moment, the country is in a fix with most international organisations like the European Union, of which most investors are EU affiliates,” she said.

“There is need to have a reasonable Foreign Affairs minister who will look into all these issues as well as tell Cabinet what investors expect from the Indigenisation law.”

Mwale said the country needs to resuscitate agriculture and dormant parastatals.

Other economic experts assert that austerity measures such as reducing government’s expenditure on its bloated workforce would restore the fiscal credibility of the financially-shaken southern African country and combat the rise of interest rates, which normally accompany growing debt levels.

“It is always very difficult for a country to come out of deflation and the case of Japan is a clear example as it has over the past decade struggled to get to the inflation level,” said Johannes Thom, a Harare-based economist.

Comments (19)

The problem is the fat does not know why others are thin, so the fat cannot have a solution for the thin. The politicians have become so rich that they don't understand how one can sleep hungry. The rich move around with stashes and stashes of the green back and the poor are fighting for a square meter to sell tomatoes in Julius Nyerere way. These guys are too rich to understand that.

Maita Manyuka - 12 June 2014

The whole world wants a new gvt in Zimbabwe,NOT these ZANU PF thieves. Whatever the ZANU PF gvt does will not produce any meaningful results as long as they want to continue ruling this country. ZANU PF had their good 34 wasted years in power&it's time up for them to leave. This NIKUV business only wins them elections but not the economy--NEVER EVER. People don't eat political power...

CHIGORORO - 12 June 2014

LETS PLEASE GO BACK TO THE DRAWING BOARD ZIMBAWE IS THE RISKEST COUNTRY TO INVEST IN THE WORLD SO WHATS NEXT????????????

Zimbabwe - 12 June 2014

ZANU(pf) was handed over a very sound economy by Ian Smith, a perfect economic blue print. Now they have now destroyed the economy sector by sector in 34 years: and this has been done by guys with countless degrees after their names: and they dont want to go.

Twere G - 12 June 2014

I think we should do away with self interest, think beyond our personal, local or party interest. It is the time for those who think the sword is mightier than the pen to work with the ordinary people.

New Tekere - 12 June 2014

I don't think anyone in ZANU PF is normal. They can't be normal work with a crumpling economy like this. What we have are extremists in expensive suits masquerading as a civilian government. Underneath they are brandishing AK 47s. They don't know how to le go. They won't let go. Because their madness brought them sweat power and unimaginable wealth. Fear is the weapon of choice. And they use force on the population if need be. They are terrorists, like Ian Smith said. And he was right. The only way is to take them out by force or exercise a whole lot more patience and wait for them to die from natural cause.

taps - 12 June 2014

Tine Mishonga yechivanhu inowedzera nguva pabonde kuti irebe, inokudza nhengo dzana baba mumazuva 7, inosimbisa musana, inopedza zvirwere zvepabonde, inorapa asima, zvirwere zveshuga uye newekuuchika unoita kuti pamuviri pabate. fonai pa 0737286007.All herbs does not have side effects and comes from Malawi.

DR T - 13 June 2014

Indeed ZANU PF inherited a very health economy which they destroyed through greediness over 34 years.Their true colours are now clear.They only succeeded in bringing & promoting corruption, election rigging,poverty,suffering, prostitution & all vices of whatever imagination. Recovery of our economy remains a pipe dream for as long as ZANU PF is in power.

DANGURANGU - 13 June 2014

Zvechokwadi hapana chakaunzwa ne ZANU PF kupfuura umbavha. Tainzi pamberi nokunzwisisi izvo taitopembedza mbavha. Ava varume ndidzo mhondi chaidzo.

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Tipeiwo - 13 June 2014

Should we surely wait for natural death to take them all. they are grooming young one with the same line of thought. Zvino todiiko vana vamai. Kotikatoravo pfuti sezvikuitwa navamwe zvinei? surely lets consider an armed struggle. they dont respect us these people. They stole until they distroyed our economy yet they are walking scort free, noone is asking where they got their riches. They go to their farms in the bush without fearing for their safety. surely the history of this country shall not forgive us. WHAT ARE WE DOING ABOUT IT? ARE WE COWARDS, WHERE ARE THE GUNS. EVEN THE SOLDIERS OF OUR COUNTRY ARE THE POOREST YET THE DEFEND AND PROTECT THESE THIEVES. LETS WAKE UP AND FIGHT FOR OUR RIGHTS. I AM ANGRY.

Taneta - 13 June 2014

everyone zanu or not, christian or not, hwindi or CEO can see that the country is about to fall. our children will ask us what we were doing when the country collapsed and we will look like fools and cowards to them.

Joseph Gabriel - 13 June 2014

everyone zanu or not, christian or not, hwindi or CEO can see that the country is about to fall. our children will ask us what we were doing when the country collapsed and we will look like fools and cowards to them.

Joseph Gabriel - 13 June 2014

Problem with the Bloks and Robotsons is that of repeating statms without real proposals on the table: review! evaluate! change! which/ what/who? If u want JM tbe FAM or CM to be Info, propose so?

LSC - 13 June 2014

I have often wondered if it is possible to be Zanu pf and be a devout christian at the same time. They purport to be in charge and yet their methods of acquiring governance authority is dubious. Is there any morality for somebody to occupy an office when they know that they are not supposed to be there in the first place; after subverting the will of the majority through Nikuv. These guys don't care a hoot about the damage they have caused to the country and its poor citizens. This talk about 'handing the country back to the whites' is a decoy meant to justify their looting. What justification is there about those who are handing the country to the Chinese? Until the issue of legitimacy has been addressed; no sane investor is prepared to pour their money in a pit called Zim.

tomasi ndofeni tohwi - 13 June 2014

Factions exist in Zimbabwe not because. each faction believes they can improve the people's lives, it is all about self enrichment, greed and more looting. We have analysts like Bloch, Masunungure, Mandaza, Robertson and them always sharing their worthy advice to the government but because it goes against their grand scheme of creating wealth for themselves, they would never take heed. Cry the nation of Monomotapa/Machobana/Zimbabwe.

Dr Know - 13 June 2014

The problem we have cowards in this country when ever you plan to chase away these thugs from power they rush to alert them about the plans . But lets not worry about those mpimpis they will always there lets revive the final push and push away these election thieves from corridors of zimbabwean power once and for all .

Diibulaanyika - 14 June 2014

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