Zim must prepare for post-Mugabe era

HARARE - Zimbabwe must urgently implement key economic reforms to regain its once-prized position as a thriving economy within sub-Sahara Africa in the post-Robert Mugabe era, a top American researcher has said.

This comes as the country, which has known Mugabe, 92, as its only leader since 1980, is on the verge of an economic recession due to the nonagenarian’s populist policies and general mismanagement of the economy.

International research analyst Clifford Drake, however, said the country must work on revising its anarchic monetary system, invest in fading and decrepit infrastructure, and promoting more regional cooperation and trade agreements among other reforms.

“There has been a great deal of discourse regarding the health of Mugabe and the power struggle which may emerge in his aftermath, a prospect which increasingly looks likely. These discussions often miss a hard truth — regardless of who’s in power, there are economic realities which will need to be addressed, facts which even the Zanu PF party seems to recognise via Finance minister Patrick Chinamasa,” he said.

This comes as there has been intense debate concerning Mugabe’s health and whether Zimbabwe’s strongman is still fit to continue holding office due to advanced age.

Political allies say the president is still alert and lucid, though some say he occasionally dozes at meetings.

Last year, he stumbled in public on more than one occasion and last autumn he read the wrong statement at the opening of Parliament.

The prospect of life after Mugabe is concentrating minds. The international community, which has treated Zimbabwe as an outcast for years, is cautiously preparing to welcome it back into the fold.

Talks have intensified with multilateral institutions with the aim of helping Harare clear nearly $1,9 billion of debt in arrears in the hope that it will be able to gain international funding to repair its battered economy.

Reaching an agreement with the International Monetary Fund, World Bank and African Development Bank would end 15 years of exclusion from international lending.

Drake said one of the most obvious steps the country should take is cutting benefits to the public sector or, at the very least, to halt the promised increases in line with prescriptions from the Bretton Woods institutions.

“With public payrolls accounting for over 80 percent of government expenditures, such a move would seem obvious yet doing so would also upset the exact base of support which Mugabe and the Zanu PF have depended on for decades,” he said.

“Resistance to such a measure has even reared its head recently yet it appears as though things may prove to be different this time around since they simply cannot afford to pay employees as it currently stands and supporters, such as veterans, are already turning sour and protesting in the streets,” Drake added.

The latest calls come at a time when Zimbabwe’s economy remains in a precarious state. Although the hyperinflation that peaked in 2008, when the price of goods practically doubled every day, has been quelled, the cost of stability has been high.

Zimbabwe has stopped printing its worthless currency, relying instead on the United States dollar, which is virtually the only currency accepted by shopkeepers and businesses.

Dollarisation has effectively ended the central bank’s ability to affect monetary policy or to create credit. With acute electricity shortages and political uncertainty, economic activity has screeched to a halt.

Tens of thousands of people lost their jobs last year as companies ran out of cash to pay wages, according to the Confederation of Zimbabwe Industries.

Industrial capacity utilisation has fallen from 57 percent in 2011 to a 34 percent in 2015, as factories stop producing goods that many people struggle to afford.

Once a regional exporter, Zimbabwe has been rapidly de-industrialising.

Only six percent of the working population are employees of either large companies or the government with taxable income.

With its once enviable infrastructure in decay and the worst drought in decades gripping the region, prospects for this year are very gloomy with the economy expected to register negative growth rates.

Drake noted that when it comes to investment, there are two policies which could provide massive dividends for the southern African country.

“Rolling back some of the stringent ownership requirements currently plaguing the nation and addressing the disastrous land seizures of the 2000’s. These decisions, after all, sunk the economy from 1998-2008 so reversing some of these moves could at least reassure investors while providing more flexibility for entrepreneurs to actually take risks within this once thriving nation,” he said.

“This would mean revoking, or at the very least weakening, the requirement that ownership must be at least 51 percent black Zimbabwean, re-establishing property rights, and attempting to reverse much of the seizures that had taken place from previously successful commercial farming operations.

“Beyond just the reversals, however, extensive privatizations are certainly possible as long as the previous steps are put forward, a prospect which would not only set the tone for future investments but also provide much needed revenue to aid with the arrears and this transition,” Drake added.

Comments (1)

There goes the conundrum, I once mailed Musewe and today he seems musoro damba. Tractors , implements plus crops and livestock looted on farms runs to over US$100 billion only at the current replacements rate let alone the farm market value with interests. Getting those farms will be poisoned chalice as what will we produce and at what quality plus for which markets as they will be assets under international disputes plus. Who will fund the GMB when it's currently in the grave yard. When Amini was In charge his tribe the Acholi would settle anywhere as they pleased but when he was chased out of Uganda, they found themselves loading everything is including cattle back to their original places. Lending like the Zim$ era with no collateral plus reckless and useless will not take us anywhere plus there is no cheap funding from anyone anytime soon as the national credit rating needs a century of confidence building up after all we suffer from the dutch desease, until we are able to create our facebooks and whatsapps, for the time being the diagnosis remains very very grim - cry my fatherland.

Tsaurai Tiwawone - 21 September 2016

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