Policy inconsistencies haunt economy: Ex-PM

HARARE - Former Prime Minister Morgan Tsvangirai says government’s policy inconsistencies were hampering Zimbabwe’s prospects of economic turnaround as it remains an albatross in attracting foreign direct investment.

Tsvangirai said the policy uncertainty and inconsistencies on key programmes such indigenisation and economic empowerment were not helping matters in bringing sanity and predictability, the two key factors for economic stability. 

“There is an acute lack of investor confidence and support by development partners, driven by the legitimacy crisis, as well as a ballooning debt which remains unserviced,” he said.

“Without legitimacy, the country remains exposed to risk and uncertainty, two factors that determine investment and economic progress,” added Tsvangirai.

This comes as Zimbabwe continues to wobble in attracting foreign direct investment, drawing in a mere $410 million against $56 billion that went into African economies last year, according to a United Nations research report.

The southern African country’s economy — predicted by the World Bank to grow by only two percent this year against government’s 6,1 percent forecast — urgently requires significant amounts of foreign direct investment to create employment, enhance technological progress, improve productivity, add value and beneficiate its raw materials.

Tsvangirai noted that the Zanu PF-led government has run out of ideas, even in the wake of shrinking revenue collections as a result of a diminishing base.

“Our grim economic plight as a people would have been surmountable had there been a credible election last year, even if it had meant a genuine and fair loss by the MDC-T. The business sector has been crippled and shackled by a biting liquidity crunch, creating a gridlock that has negatively affected commerce and the services sector,” he said.

Market experts say Zimbabwe — which is still emerging from a decade of economic decline and hyperinflation and a stuttering economy in the aftermath of a disputed election in July last year that extended President Robert Mugabe’s 33-year rule — must create a stable environment for investment.

Economist Godfrey Kanyenze said resolving the contradictions arising from the indigenisation law would result in increased foreign direct investment.
Kanyenze noted that the proposed amendments to the indigenisation law must be “inclusive and results in policy consistency and predictability, then it removes the suspicion and uncertainty associated with a discretionary framework,” he said.

“Given the past experiences where government ministries and agencies contradicted each other, inclusivity will help send a clear and unified signal which enhances confidence to would-be investors,” added Kanyenze.

Thedias Kasaira, Imara’s managing director, recently said “most investors want to see it (amendments to the indigenisation law) in black and white rather than just talks”.

“Our position is that as long as there is no clarity on the law people will continue to doubt,” he said, adding that “but we believe there is nothing really wrong with it as long as it is applied to all in the same way.”

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Comments (8)

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boreholes - 7 July 2014

Morgan Tsvangirai..what do you know about the economy...(Wazini wena ngomnotho wezwe wena ZIHLATHI ZE CAT)

silungisani ndlovu - 7 July 2014

@silungisani ,i would think you lack knowledge your self ,morgan whilst being secretary general of zctu,was always in the herald giving and commenting on economic issues as it affected labour..do you think the current holders of 7 plus degrees know about economics and the economy if so why is it from the day the year he became fist secretary,and president of zimbabwe in 1987 inflation increased and continued upwards from that year till 2009,incomes and the economy shrenk from 1991 till 2008,it only started growing when Morgan became part of Goverment.i would think it best for all of us to ask are we really an educated and learned nation,or simply man and women who praise the idea of education ,yet fail to use it or better yet know its meaning.this nation and companies continue to statter and fall under the leadership of man and women who hold 5-7 degrees yet lack the vision to direct those very companies and indeed the nation out of trouble..i think by his record Tsvangirai is the best man for commenting and speaking about the economy

chokwadi icho - 7 July 2014

Hate him,like him Tsvangirai has what it takes to revive this tattered economy, never mind loss of an election to thieves.We do for a fact as ZANU PF know that the election was rigged.That is why legitimacy & economic policy clarity become a big problem in this country. ZPF prioritized winning the election but at a huge cost to the nation as a whole. MT entered that election in good faith,something his enemies are now capitalizing on .But one cannot be blamed for losing property to tsotsies. ZPF know very well that they can't contest MT in a free&fair election.Therefore, ZPF as a party ,won the election but the people lost heavily.Who is suffering today??

kugadzirisa - 8 July 2014

CHOKWADI....Tsvangirai was the Prme Minister a year ago....what did he do in the Zimbabwean economy...what do you mean that ii have no knowledge of Morgan Tsvangirai.....

silungisani ndlovu - 8 July 2014

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