Online Reporter
PROVIDING a firm foundation for major economic revival and sustained growth in Zimbabwe under the Second Republic has been the insistence of technocrats brought in by President Mnangagwa, and then backed fully by him, to fix the fundamentals.
No one claims this was easy and it needed the full force of the President to ensure there were no short-term attempts to escape the required hard discipline and that the technocratic experts were expected to continue to hunt down and eliminate all dubious oddities that had grown up in the economy.
The rewards of this determination are flowing through, with one of the fastest economic growth rates in the world and the fastest in our region, plus exceptionally low inflation rates, currency stability and generally the solid foundation that in turn has been encouraging investment across all sectors of the economy at unprecedented high levels.
Success breeds and multiplies more success.
Zimbabwe’s achievements have been publicly praised by the International Monetary Fund this week as it presented its new regional economic outlook for sub-Saharan Africa.
What appears to have amazed the IMF is that Zimbabwe managed to build up solid economic growth and performance although barred from the concessionary finance that most countries in sub-Saharan Africa routinely access.
The Zimbabwean achievement is thus the direct result of the country adopting the exceptionally prudent monetary policy that has underlain the achievements of the Second Republic. This has meant that Zimbabwe has not only not created money out of thin air, but has also had to hunt down the money creation outside the Reserve Bank of Zimbabwe that was occurring, and make sure those taps were turned off as well, and there were a surprising number of these.
From the time the Second Republic took office, it has become a firm, never-to-be-varied policy that the Government lives off its own, that is the taxes it raises with parliamentary approval, and that the national budget itself is regarded as an exceptionally serious process, rather than just a wish list, with performance continually audited.
This does mean that once Zimbabwe has finished the process of sorting out its debt arrears with the global financial community, and this process is now assured of success with the good wishes of most, access to new concessionary finance will be possible. But it is very clear that the present Government does not see such access as something to replace the hard discipline and the rewards that has it has brought.
Rather the access will allow a degree of acceleration in building up of infrastructure and other areas where there are definite new flows of tolls, fees and other revenue that can be used immediately to start servicing new debt. Sanctions led to the closing of doors for new finance and the build up of arrears, but our own mastery of our situation means we now know how to apply renewed financial access as this becomes available, to reinforce our successes rather than create new problems.
The lost years mean Zimbabwe has learned that it is possible to go it alone, so renewed access is more a return to the original reasons for the concessionary finance agencies being set up, to speed up progress not to create that progress in the first place and certainly not to allow an abdication of responsibility among lenders.
The clean up of the Zimbabwean accounts and the turn to sound money and sound financing has been a major factor in the economic revival seen under the Second Republic. Pro-investment and pro-business policies obviously help and are in fact essential. But they have to be built on the secure foundation of absolute trust in fundamentals.
The Government itself has led the investment drive in agriculture, for many reasons including having far faster rural development that brings in most families and most communities, as well as adequate supplies of food so that as a nation we feed ourselves. But even here the private sector is now expected to make greater efforts through contract farming and financial support for irrigation expansion, and this is happening because the Government has built a firm base.
Mining has seen dramatic expansion across a wide range of minerals.
Tourism is in a similar position, although with a higher percentage of local investment and more jobs for every million dollars invested.
Manufacturing had become the poor relation in the investment world, but again Second Republic policies meant that those reformed older enterprises plus the new investors could push ahead, as seen in local supermarkets where local products now dominate the shelves, with the new breed of industrialist very concerned about quality, producing goods that compete on quality with imports as well as price.
This year has seen an explosion in industrial investment, to US$1,4 billion, as the country starts cashing in on the major fixing up of the fundamentals in previous years and the expansion in raw materials from a far wider range and availability of agricultural and mining raw materials.
The industrial expansion has always been seen as the important next phase of development, adding a lot of value plus a large number of decent skilled jobs, but it could not be done in isolation. The upgrade in quality and solid dependency on the fiscal and monetary policies foundations were required.
