EDITORIAL COMMENT : No to politicking in times of austerity Dr John Mangudya

The biggest talking point for the week and perhaps for more weeks to come, is the 2 cents charge for every $1 electronic transaction announced by Reserve Bank Governor, Dr John Mangudya, on Monday.

The reaction of the ordinary person on the street would still be understandable without being muddied and muddled by opportunists seeking to make political mileage.

This is because we are talking of money which is hard to come by; we are talking about people considered unemployed in the formal sense; we are talking about people who make their living from hand-to-mouth by scraping the bottom of the barrel.

Government is fully aware of all this. But it is only a partial view of reality. The broader reality is that President Mnangagwa has staked his Presidency on rebuilding the national economy, turning Zimbabwe into a middle income economy by 2030.

The President and his Finance and Economic Development Minister, Professor Mthuli Ncube and Dr Mangudya, have all warned that it won’t be a walk in the park. This is the context in which drastic measures will have to be adopted.

A recent World Bank report estimated that as much as US$7,6 billion was circulating in Zimbabwe’s informal sector. This is money that goes untaxed in an environment where only 10 percent of the population pays taxes.

It is this 10 percent which must meet all Government expenditure every year.

We must be realistic about what we expect President Mnangagwa and his administration are trying to do and the role we can, should and must play as responsible citizens.

When the President said recently that we should stop moaning about sanctions, but find ways around them, that was the first indication that he means business and that the nation must prepare for austerity. It cannot be politics as usual.

Zimbabweans must be chary of being used by people seeking to advance their political careers. Notably, the first groupings to try and whip up public emotion are not a majority of those in the lowest rungs of society. It was politicians and union leaders.

MDC-Alliance partner, Tendai Biti, called the two percent charge a “disaster”. Mutasa of the Zimbabwe Congress of Trade Unions has threatened to mobilise protests. So has Majongwe of the Progressive Teachers Union of Zimbabwe.

Everybody knows the problem with Biti. Everything on the other side of the political divide is a disaster. That’s how he recently described outgoing British Ambassador to Zimbabwe, Catriona Laing, for working to improve relations between Zimbabwe and Britain.

Mutasa and Majongwe are hypocrites. Former Finance Minister, Patrick Chinamasa, revealed early last year that 93 percent of Government revenue went into salaries. Teachers constitute the biggest number and get one of the biggest allocations. And the two are always pushing for higher allocations from Treasury.

In the process pushing Government to borrow more to fund recurrent expenditure on salaries, hence the huge national debt.

It is, therefore, ridiculous to ask ED what the money borrowed by Government was spent on. How does paying 2 cents per dollar for electronic transactions contradict financial inclusivity and urging people to use plastic money to beat cash shortages?

That takes us to the nub of this week’s talking point and business should not feign innocence. They have been calling on Government to bite the bullet, to accept the World Bank and the IMF’s austerity measures to revive the economy.

What did they have in mind? That only the poor should bear the pain of austerity while they rake in super profits! When they say Government should cut its expenditure do they expect teachers, soldiers and the police to be thrown onto the streets overnight?

Let us accept where changes have been made by the new administration. There’s little ED can do about the high public debt. He inherited some of the structures from the previous regime.

He can’t be blamed for overspending since coming into power. Instead he has trimmed his Cabinet. Finance Minister Ncube has promised to reduce Government borrowing on the market and limit its overdraft facility with the Reserve Bank.

The good news is that if the 2 percent levy can meet civil servants’ salaries; that reduces the need to borrow more from the market, allowing the productive sector to have access to bank loans. Fewer travels and reduced Presidential delegations, like the recent one to the United Nations, mean less spending by Government and less borrowing.

We should not expect Prof Ncube to work miracles on the economy where no sacrifices are made. It is irresponsible to whip up public hysteria to exploit people’s desperation. We know Chamisa is fast losing currency and will do anything to stoke people’s anger for his miserable political fate, of his own making by the way.

Otherwise let’s give ED and his Cabinet a chance. Two months in office is too early even for a baby to crawl!

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