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Dr Gift Mugano
Zimbabwe is for Zimbabweans. Zimbabweans can solve their problems as long as they genuinely listen to each other. There is no problem that is insurmountable. I have noted of late that there are some policy measures which have been taken with limited consultations thereby becoming a bone of contention in our beloved country.For example, in recent months and weeks we have witnessed the Reserve Bank of Zimbabwe and Ministry of Industry and Commerce coming up with cocktail measures to deal with liquidity challenges and competitiveness of the local industry, respectively. These are current issues. I found it useful to use these measures as classical examples as we dialogue on economic matters of our beloved country.
On bond notes, the Central Bank purported that it consulted widely yet we all saw the wide condemnation of the move. The market also responded negatively to the move. We witnessed bank overrun and they are still happening. Subsequent discussions around this matter yielded no change on this matter except the shift in dates for the launch of the bond notes and focus from liquidity management to export promotion.
The bond notes is still an issue and as we move towards the launch date it is important for the Central Bank to deal with the scepticism about the subject. What is given is that if we were to go for national elections on bond notes, the outcome will be certainly a NO. The point is if the policy measure is being rejected why force it on people.
In every country, policy implementation succeeds when there is national consensus. For us, we have travelled a long road without national consensus on a number of policy legislations hence the dismal failure in policy implementation which has become cancerous since independence.
We must reverse this trend. It will be good that we start with the bond notes. The bond notes will go into memory lane as one such measure which created serious bank overrun and the subsequent cash shortages and perpetual financial exclusion. People sees bond notes as the Zimbabwe dollar coming back in the form of a lion covered by a goat skin. This why the market has rejected them.
If the Reserve Bank had made thorough consultations it could have foreseen this. However, it is not over yet. The honourable thing to do for the Central Bank is disband the bond notes train. Yes, at some point in life we must accept that reality doesn’t cheat. So, we must always do the right thing — doing corrections.
Coming to import restrictions, the Ministry of Industry and Commerce, as we know gazetted statutory instrument 64 of 2016 compels imports of a number of products on the list taken out of the Open and Generalised Import Licence — now require import licence. There is no doubt that Zimbabwe’s economy is under siege from cheap imports. It is imperative that we take measures to help the local industry. I want to repeat, we must take necessary measures to save the industry.
These measures should exclude direct protectionism as in the case of the import restrictions because this will bring back scares of corruptions in the issuance of import permit, shortages and continuous suffering of the generality of the population who are on the bottom of the pyramid who survive on cross border trading while enriching the elite.
At the same time, undoubtedly, the stator instrument 64 of 2016 is violating the World Trade Organisation (WTO) provisions under chapter IX.1 which prohibits member states from putting import restrictions and imports ban (although we didn’t ban as in our case).
I don’t think Zimbabwe wants to attract international spotlight at this point as it creates problems of negative perceptions which do not only invite retaliation but also repel foreign direct investments.
So what is clear is that the public despondent which has been registered on this policy is clear testimony that policy is not well consulted and it does not save the majority. The policy is not representing the views of the stakeholders and we must always avoid that. In this particular instance, the statutory instrument didn’t take into account the need to accommodate cross border traders who were surviving on the same imports.
Naturally, the expectations are that industry will pick up and be able to employ the same people that are doing cross border trade. The reality on the ground is that our industry is stalled by antiquated machines, high costs of utilities and structural rigidities which makes it virtually difficult to be responsive to these new measures there entrenching the vulnerable people (cross borders) in abject poverty.
In this instance, instead of introducing import restrictions which did not only raise concern locally but regionally, the ministry, through genuine dialogue, could have come up with a number of policy options like value chains, business linkages, local content legislation and even to convert the $200 million facility into an industrial resuscitation package instead of bring the hullabaloo on bond notes.
Zimbabwe needs holistic approach to our economic problems. The reality of the matter is that all the measures we are witnessing are piecemeal solutions. They will not take us anywhere. It is tantamount to putting lipstick on a frog to make it beautiful. The question is how do we work around the clock to address economic challenges we are facing. Undoubtedly, we need to set up a taskforce for economic revival which is made up of all economic ministries chaired say by Ministry of Finance.
The taskforce must be focused on addressing agricultural productivity. By virtue of the fact that agricultural sector provides about 75 percent of raw material requirement for the manufacturing sector and is well linked within the value chain of major sectors of the economy, it is obvious that if we sort out the agricultural sector we have solved half the problem. There are sticking issues which need to be sorted out in our quest to revamp agriculture sector. Among issues we need to address now as we move towards agricultural season are:
Identification of farms with enough water bodies which have capacity to meet national demand in selected commodities and subsidise them;
Operationalisation of the commodity exchange — the commodity exchange will creates markets for agricultural commodities particularly grains and also unlock funding through the provision of warehouse receipts which can be used as collateral as well as derivatives;
Provision of security of tenure of land in order to unlock funding;
Addressing legislative issues around contract farming;
Recapitalisation of the Grain Marketing Board;
Recapitalisation of the Cold Storage Company;
Repositioning of the Agricultural Rural Development Authority as the champion for restoring food security;
Commercialisation of land through the expedition operationalisation of joint ventures between resettled farmers and potential investors irrespective of colour;
Dealing with climate change mitigation and adaptation for the generality of the farmers.
It is my humble view that if we focus much energy on agricultural sector and of course continue to support other sectors as highlighted in the Zimbabwe Agenda for Sustainable Socio-Economic Transformation (Zim-Asset) we will come out alright.
As I sum up, policy makers have a responsibility of giving us direction. This therefore means, they must always come to us through our respective business association as in the case of the private sector, through the media (both electronic and print) as in the case of the generality of the population and of course through platforms like workshops for dialogue about a particular policy.
Policy makers must move away from the character of lobbying strategic offices in order to have the policy accepted. The political will is already there as all these policy measures are coming within the scope of the Zim-Asset. What is important now is to go to the people — the people are the major implementers of the policy after all so why donate to them forcibly? And, finally, as we consult, we must be prepared to dump the policy if there are clear facts that there are more costs than benefits. In the same vein, policy makers must never take people’s views as offence. These views are being forwarded in the love of our beloved country and UDUGU!
TOGETHER WE MAKE ZIMBABWE GREAT.
Dr Mugano is an Economic Advisor, Author and Expert in Trade and Competitiveness (currently in South Africa). He is a Research Associate of Nelson Mandela Metropolitan University. Feedback: +2772 403 4182 or [email protected]
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