admin
FOR the past three years, Zimbabwe has not only had the fastest economic growth in Sadc, but has been at the top with a wide margin, largely because President Mnangagwa and the Second Republic have put in place the necessary policies to combine hard working and ever more skilled Zimbabweans with the nation’s natural resources.
And this has been done largely with Zimbabwean money, although a decent investment policy has also attracted a fair whack of capital from outsiders, especially in mining.
The sanctions imposed at the beginning of the century largely meant that the normal concessionary loans from multilateral institutions and even a lot of the commercial loans through the global banking system were simply vetoed or unavailable.
Those sanctions were designed to make the people of Zimbabwe suffer so much that they would rise up against the Government. Instead they elected President Mnangagwa and the Second Republic Government and told them to deliver.
In his rally at Nyazura this week, President Mnangagwa was specific about what he called the inward looking strategy, seeing what Zimbabwe had and what Zimbabweans could do and then putting them together to create wealth.
And that wealth has been created largely through policies that spread the wealth, in other words involving large numbers of Zimbabweans and in the case of agriculture, millions.
At the beginning of the Second Republic, the decks were cleared, with budgeting processes that made sure that what Government spent came from what we paid in taxes and charges and fees, rather than from borrowing. The budgeting also included setting aside a high percentage, second only to the civil service payroll, for capital spending on infrastructure.
The second big area for ground clearance was zero tolerance to corruption. To take just one example, a lot of the money for the spectacular progress in road construction came from Zinara and the toll fees. But that required making sure that Zinara was properly and honestly run, which needed a new board and management. The money used was spread, by choosing Zimbabwean companies, so they grew, hired a lot more people and paid more taxes. These are known as positive feedback loops.
We need to look at some of this growth carefully. Agriculture has roughly quadrupled in value somewhat ahead of schedule. This increase comes from farmers growing a lot more, growing it better and generally converting their hard work into food and money.
The Government oiled the process, using top-level research to find the best way of farming as climate change bit, conservation agriculture, and then making sure all farmers had enough inputs to convert their hard work into food for their families and money after selling cash crops and surplus food crops.
It should be noted that the Government was not growing anything, but instead was making it possible for farmers to work hard and grow a lot more by making sure the finance and input systems were working, and that everything grown could be sold in a guaranteed market. Agricultural growth was critical, not just for food security and now food exports, but to make sure that the rural majority could move out of dire poverty and become producers who could earn cash.
The systems made sure that the land reform that had ended a lot of injustice in land distribution became meaningful when the farmers on the new lands could make money. When you consider that more than 1 million farming families already have to have two bank accounts, in local and foreign currency, the change has been dramatic. The numbers will more than double over the next season.
Mining will this year be valued at more than four times its 2017 figure. The Government policies here were cleaning up the laws and allocations of mining rights, so miners prepared to invest and reinvest were assured of adequate security and access. This meant that established miners were prepared to reinvest profits, new miners were prepared to come in, and abandoned and closed mines could be reopened. At the same time there was a spread of wealth by allowing small-scale mining.
Infrastructure development, the steady progress in fixing up the roads, building new dams, opening or rehabilitating irrigation, adds wealth, since the prime cost in all this work is the payroll, but also provides the backbone for others to produce and sell more. You need a decent road to get the lorries in to take the bigger harvest out, for example.
Manufacturing has been growing, possibly not as spectacularly as mining and farming or even infrastructure development, but this tends to be the next level in growth. When you start counting farming households earning cash from farming as well over a million, the new markets being created for manufactured products are obviously growing very fast. They will become ever more important as people move ever further up the socio-economic ladder. Two million middle income small-scale farmers will obviously buy a lot.
This is where inward looking economic growth pays such large dividends, each level of growth creating vast new markets and new consumers and users for the next level of growth.
And that in turn creating new opportunities for future levels as well as the existing levels.
President Mnangagwa was clear over what the priorities were as economic growth continues and accelerates. Education had to stress more scientific and engineering degrees and diplomas, to make sure that the human resources were there to staff present and future industries and make sure that there were Zimbabweans who could open and build their own production companies.
Communications had to improve dramatically. The President was discussing the need for a dual carriageway from Harare to Beira, and seemed to be suggesting that Zimbabwean companies might be doing the Mozambique leg as well as the Zimbabwean leg. Beira would need to be expanded and Zimbabwe and Mozambique are discussing a second port about 60km along the coast at what could be a better site. Incidentally making it possible for more Mozambicans to be employed and earn better incomes will almost certainly create new markets for Zimbabwean producers.
The fast growth rates Zimbabwe is now seeing, and these being significantly greater than the population growth, means that on average most Zimbabweans are earning more each year. This is how you create an upper middle income society, by growing your economy fast but then also making sure that the overwhelming majority win from that growth with new jobs, better jobs, establishing their own businesses, and having two or three million profitable farmers.
Online Reporter