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Tichaona Zindoga Political Editor
President Mugabe on Tuesday presented his much-awaited State of the Nation Address which was a key marker to the seriousness he attaches to the situation the country finds itself in.

The timing was important.

The country finds itself in a tight economic corner of stunted growth, de-industrialisation, liquidity crunch and rampant job losses occasioned by the July 17 Supreme Court judgment, which set off a tsunami of sackings by firms ostensibly in the exercise of their rights under common law.

The net effect of these developments has been felt chiefly on the social economy and many people have been worried by the trajectory that this country has been taking.

We reached that lowest ebb in 2007-08 in the hyperinflation era when Western sanctions bit into the country as our detractors cheered on and “tightened screws” on the economy to achieve regime change. Looked on the whole, the woes bedevilling Zimbabwe are not unique as the world today is confronted by economic problems that can easily give rise to crises, crises of catastrophic levels, at worst.

In Europe, the current migrant crisis and the sense of siege in Greece are all a result of economic challenges that the world is facing and, look everywhere you want, the signs are there, signs of economic trouble. China, the world’s second largest economy, is reeling from a slackening economy and the crash of its currency, which has also sent other economies in the region in a tailspin. And, boy, you have to see the pictures of those distraught men mourning their losses at the stock market!

The same misery is affecting the East, the North, the West and South. It is called a global recession and we have been in it for a couple of years now. Here, President Mugabe on Tuesday came up with a 10-point plan to tackle problems facing the country.

Tuesday’s event has been widely reported and it is critical to point out that of the 10 points, Zimbabwe could do well to act on only half of those points, to register quick wins and steer the country to economic recovery and eventually more. Happily, Zimbabwe does not need huge sums of money, which money is hard to come by these days, and some things need as much as a stroke of a pen to implement and boom! we have our change for the better.

Pursuing an anti-corruption thrust

This is number nine on President Mugabe’s 10-point list. It is common cause that the country’s development has been hamstrung by corrupt officials. Unscrupulous people have bled the country dry in both the private and public sectors.

In the latter, officials have unashamedly sought kickbacks from investors, have stolen money or awarded themselves hefty packages at a time when the companies or institutions they lead have been struggling and dying.

Corruption has turned away many an investor and even former South African President Thabo Mbeki has testified that his compatriots got demands for kickbacks and ended up abandoning the country. Many investors would — and they have. Corruption is a crime from the low levels of bureaucracy right up to the top echelons. In China, they have a nice way of dealing with the scourge and this has seen even the very top officials and politicians getting their just deserts.

Their law nets what they call the tigers and flies, and we must do the same. It only takes a directive from the top, and its implementation, to say the war is on against corruption. Let the war begin in earnest and we will see results in no time.

Modernising labour laws

Optimists and pragmatists among us have seen a silver lining to events that have unfolded since July 17. Whereas some people are seeing job losses, some are already seeing job creation. The reason is simple: they argue that the country’s laws have been so rigid that they did not allow companies to necessarily dispose of excess baggage in labour. Retrenchment costs and the legal rigmarole were a turn off.

In turn, complacent, unproductive and useless labour would saddle companies and bog them down. The triggering of the common law provisions, which are now but codified under the new Labour Bill, make it easy for both parties and happily so for the employers that are able to keep optimum labour and hopefully be able to produce. On the other hand, employees are now called upon to produce or face the sack. If more fine-tuning of the labour laws, which we hope does not take too long, is effected, it is clear that this will stimulate the economy.

Unlocking the potential of SMEs

This is point number four in President Mugabe’s 10-points. In light of the massive de-industrialisation that has occurred over the past 15 years, SMEs are the new economy. (The old economy, for all its apparent glory, was going to die anyway because it was a colonial design which would not stand the realities of post-independence.)

It is a pity that we have not done enough to ensure that the SMEs sector drives the economy. Many of us tend to look down on this sector because we imagine the real economy to be the one that was in the hands of the white gods. But what has happened to emerging economies thanks to the growth of SMEs?

One paper summarises the importance of the sector as follows: “Supporting SME growth in emerging economies has various benefits. The returns on capital for SMEs can be around 20 percent to 30 percent a month, which is much higher than interest rates usually are. Thus, promoting the growth of SMEs has a positive effect on GDP growth, since output, value-added, and profits will increase. The growth of SMEs also increases Government revenue from taxation (provided that SMEs are taxed appropriately). Lastly, a strong SME sector helps to diversify the economy in a low-income country, which in turn builds the country’s resilience to global shocks and capital flow fluctuations in particular sectors.” It will not take much to formalise and indeed prioritise the SME sector in Zimbabwe to put the country on a trajectory of growth.

Implementation of Special Economic Zones to provide the impetus for foreign direct investment

SEZs are defined as “designated areas in countries that possess special economic regulations that are different from other areas in the same country. Moreover, these regulations tend to contain measures that are conducive to foreign direct investment.” This idea has been on the authorities’ lips for some time, and it is surprising that they have not been implemented it yet. Zim-Asset lists SEZs as some of the factors that will underpin economic growth. In fact, Zim-Asset mentions Special Economic Zones six times.

They should be implemented.

The beauty about SEZ is that they provide more jobs and will have the effect of absorbing those that have been sacked since July 17. Moreover, these SEZ are results-based and labour should produce, or face the sack, hence stimulating growth.

Revitalising agriculture and the agro-processing value chain.

It is a trite point to make that Zimbabwe is an agro-based economy. Even elementary school kids know that. If Zimbabwe gets its agriculture right, all things downstream will flow. Hence, investment in this sector is key, not least because it will avert hunger in the country.

Zimbabwe will need investment in equipping farmers by providing cheap inputs so that farmers are able to feed their plots and reap well.

Currently, fertilisers and farm implements are beyond the reach of farmers. The over-reliance on rain-fed agriculture also militates against the sector in this time of climate change, hence the need to invest in irrigation.

The GMB must also be capacitated to pay farmers who sell their grain. It is clear that when the country is well fed and retaining the money it is otherwise wasting on grain imports, good times can roll again.

Lastly, the sixth point, which is also missing from President Mugabe’s 10 points, is goodwill and willpower. Zimbabwe will need a good measure of that so that we see through the implementation of all the noble commitments.

And we will be watching closely how President Mugabe’s lieutenants, in particular the Minister of Finance, will fare in all this.