Victoria Ruzvidzo Business Focus
News that Government has revised its economic growth projections to 5,6 percent from 9,4 percent, citing a number of issues that have gone off the rails, makes sad reading. Of course, it’s not as if we
now anticipate negative growth but such a significant drop from initial projections does leave a sour taste in the mouth.
It implies that the economy has taken a few steps backwards in the recovery mode.
A few months ago Finance Minister Tendai Biti indicated that something along these lines would happen, but I vehemently refused to accept this because I felt the economy was made of sterner stuff and could sustain a 9,4 percent growth rate.
The fact that Zimbabwe had managed a three-year successive growth, with indications that momentum was being gained on this front, gave me and many others the confidence that a 9,4 percent growth was achievable. But this may not be the case, after all, according to Minister Biti.
Does that make me backtrack on my confidence? No, it does not!
Does this mean we should now work at a slower pace now that the target is set at 5,6 percent? Not at all! Does that mean that the economic revolution that began in 2009 is losing steam? Certainly not!
What this means is that as a country we need to summon all the energy, intellect and other factors that will keep the growth momentum alive. Maybe the curse came from the International Monetary Fund that failed to recognise our growth rate and kept us out of the high growth rankings?
Or maybe the institution sensed that the high growth figures were not sustainable after all.
I would not want to buy that myself. I think as a country we have slept on the wheel in the first six months of the year.
In some instances we knew what we needed to do to grow the economy but we just did not, while in some instances we did our part half-heartedly. The results are there for all to see.
The first six months of the year were certainly not exciting with one issue after the other getting in the way of meaningful progress.
Maybe complacency also crept in as some thought it was automatic that the economy will grow at the projected 9,4 percent.
Did we see real engagement between Government, business, labour and civil society? Not exactly. Did we all do our best to fend off challenges in our spheres of influence? Not with the energy and resolve that should have been applied.
Was it more of mere talk and little action? Something like that!
It’s no use crying over spilt milk. But there is a whole five months ahead of us to change the script for this country.
It is critical at this juncture to look at factors highlighted as militating against growth.
The Mid-Term Fiscal Policy Review Statement highlighted that poor rains affected agriculture production and yield. This is certainly not a new phenomenon in this
country and we need to adequately prepare for it.
The ministries responsible and other stakeholders should work on developing irrigation infrastructure. Dam construction, which is at various stages and phases in
most provinces, should be given priority to minimise the debilitating effects of drought.
Furthermore, the growth of drought-resistant crops can help improve production while ameliorating the effects of drought on the food situation and overall performance of the agricultural sector.
Policy inconsistency and uncertainties
This is an issue that has always proved to be the country’s biggest Achilles heel. Enunciated policies have over the years been shifted or changed mid-stream, affecting corporate plans and sending the wrong signals to investors. This area needs redress.
Furthermore, we have witnessed ministers from the same Cabinet contradicting each other on such policies as indigenisation. Such disharmony is retrogressive.
We believe the various parties can find common ground.
There has been dissenting voices in revenue generated from the sale of diamonds with the various parties throwing bricks at each other.
Lack of capital
This is probably the source of the greatest economic handicap. Projects and programmes have been put on hold due to lack of capital, particularly for infrastructure development.
Banks have also failed to adequately support the economy as a result while they subject borrowers to prohibitive interest rates and tight repayment terms.
Zimbabwe had hoped external partners would bankroll the economy but reality has struck and efforts will need to be applied towards harnessing local resources.
This is an area we have been found wanting. The economy is still to benefit from the huge mineral resources and the highly educated and skilled labour force at its disposal.
Something needs to be done in this regard.
Minister Biti said we missed the target by an equivalent of one month’s collections, at US$249 million. This is to be expected when economic activity is low and yet the expenditure bill continues to grow. Serious mathematics and and innovative revenue collection mechanisms will nee to be applied to ensure Government gets every cent possible.
Widening the tax base would do the trick but only when the economy is performing at its optimum.
Limited Implementation and monitoring
Lack of implementation of sound policies such as the industrial policy and other policies to take the economy to the next level has not been helpful to the economy.
Many documents have been condemned to bookshelves and yet these would impact the economy significantly had they been implemented.
The one-stop shop investment facility is still to be implemented, costing Zimbabwe and million of dollars in potential investment.
More seriousness is required over the next few months to create an environment conducive to growth.
This has proved to be a real cancer in the economy. Almost all processes are riddled with corruption while deals that cost the economy have been allowed to pass because someone’s hands have been oiled. Decisions have been made based on dollar power instead of viability or applicability of a system or procedure.
Such attitudes have proved costly and it takes self-introspection for this harmful tendency to be eradicated. Africa as a whole has lost billions of dollars through corruption.
Zimbabwe now ranks as one of the most corrupt countries on the continent and yet more could be achieved through clean and proper means of doing business.
These and other factors that have constrained the economic need to be looked at and redressed urgently to get the recovery process back on track. It would be another sad day for our country were we to find ourselves recording negative growth because we failed to manage the situation.
We owe it to ourselves and to posterity to grow the economy and afford the country’s citizens a decent life.
Where we have been behaving like chickens which offer eggs for breakfast, we now need to sacrifice and be like the pig and offer bacon!
In God I trust.