admincame at the height of economic challenges that decimated the domestic currency and in this regard it is certainly difficult to ignore the economic path that this Government has walked in its quest to balance both political expediency and economic interests.
President Mugabe, Prime Minister Morgan Tsvangirai and the Deputy Prime Minister Professor Mutambara, who seems to be playing a ceremonial role in Government after he was outwitted by his erstwhile colleague Professor Ncube for the top post in the splinter MDC grouping, all had a role to play.
The domination of non-constituency executive in the Mutambara-led MDC was, however, never to usher tangible hope to the citizens as any portfolio they held in Government was mostly out of gratitude to merit.
Indeed, there was hype around the new administration in 2009 as potential investors from all corners of the world swarmed Zimbabwe to witness first hand what the economy could offer.
We had the Mining Indaba, the Short-Term Economic Restructuring Programme document was launched, the Medium Term Plan followed through, austerity measures were adopted, banking sector reforms were introduced through both the fiscal and monetary manoeuvres home- grown constitution was promulgated, indigenisation programme intensified and on an unfortunate scale a number of political figures passed away during the tenure of the inclusive Government.
When the bloated Government was announced, different views were peddled on how possible it was to achieve economic growth and development when bureaucracy and red tape were still intact. It was the first phase in the history of Zimbabwe that jobs in the public service were frozen and the need to revert to local currency could not be overemphasised.
The reason for low inflation in Zimbabwe to date is the liquidity crunch induced by dollarisation not economic productivity. If we could extrapolate a scenario of bringing back the local unit into fray, inflation will definitely go haywire which means there could be a false sense of stability which had been foisted upon the economy by a “borrowed currency”.
On a positive note, the coalition managed to bring the world to Zimbabwe by winning the bid to host UNWTO General Assembly alongside the Zambians, this marks the opportune moment for Zimbabweans to prove to the world that we are not a pariah state as portrayed in some media circles.
This will be the window of opportunity to correct any anomalies normally associated with elections as African electoral systems normally entail friction and contesting of the outcome.
The inclusive Government failed dismally to deal with unemployment, external debt, capitalisation of the central bank, and revitalisation of the domestic currency, revival of the manufacturing sector and formal of the underground economy.
Recent statements by Finance Minister Tendai Biti that the country unemployment rate is exaggerated is a talking point.
There are more people who are unemployed today than they were in 2009 as most corporates began streamlining their operations to meet the high staff costs leading to retrenchments and closure of companies which could not withstand the dollarised environment.
The external debt is still a headache to the tune of above US$12,2 billion (104 percent of Gross Domestic Product) with about 60 percent of that debt in arrears.
The Government still seems to have no strategy of repaying the debt, the overtures by the International Monetary Fund for relaxation of technical assistance seem to be ushering in a new ray of hope as far as debt is concerned regardless of the strings of conditions attached if we are to have an opportunity to write off our debt.
It is the failure to correct the debt problem which has seen the growth rates being revised downwards as no foreign direct investment was forthcoming.
In Africa, foreign direct investment was up 55 percent to US$37,7 billion for the year 2012 and Zimbabwe attracted way below US$500 million
Zimbabwe’s GDP under the present Government is around US$6,5 billion against a collective GDP of the African continent hovering up to US$2 trillion, the disappointing GDP per capita for the motherland is clear testimony of how the economy has failed to tweak given the costs which had been expended in mooting different economic blueprints which could well approach US$6 billion mark if stationery, travel expenses and consultancy bills are to be factored in.
Zimbabwe is still a net importer of foodstuffs notably from South Africa and these include milk products, cereals and stockfeeds.
In 2012, Zimbabwe produced 54 million litres of milk against an average of 256 million in the year 1991. This is against a backdrop of about 24 000 head of cattle compared to 104 000 at its peak. Raw milk production plummeted to 4,5 million litres per month against an aggregate demand level of 8 million litres per month.
However, on the tobacco front, the dividends of land reform seem to be accruing as the output from the crop is on a sharp rebound. The adoption of the contract system ahead of auction has seen the volume of tobacco rising significantly.
Tobacco production started about 100 years ago and it is the best performing sub-sector in the country followed by the mining sector with agriculture in general stuttering ahead while maintaining a shadow status to its former self.
There is now an average of 90 000 registered tobacco growers with 65 percent of the output coming through contract farming. These are certainly the fruits of land reform exercise that was instituted before the inclusive Government and we hope it will spread to other sub-sectors.
Reserve bank of Zimbabwe is still undercapitalised with the overall banking sector exposed to systemic risk, the continuous extension of recapitalisation deadlines does not augur well for the policy environment as it diminishes our ease of doing business index.
Policy certainty is a hallmark of development and its significance is sometimes at par with policy impact. It is the incapacitation of the central bank which drags the potential recovery of the money market while at the same time limiting on the banks’ ability to be innovative as the cost of being erroneous can render the institution insolvent.
The informal sector is growing everyday while it is not accountable to anybody this continues to put strain on the already dilapidated infrastructure due to the dominance of free riders with only about 8 percent of the citizens contributing towards the fiscus.
The cash budgeting system was not an option but rather a consequence of limited fiscal space and there is a common belief that it spearheaded economic recovery when in actual fact it is the fundamental threat to recovery of Zimbabwean economy which has only experienced stabilisation.
It is quite disheartening that the Government does not have any economic or business matter as an outstanding or sticky point as espoused in the GPA’s 24- point roadmap.
The failure by Government to conclude the Essar deal, the politicking around the Chisumbanje ethanol project leaving millions of jobs on the wire, the everyday struggling of banking institutions, the corrupt tendencies by both legislators and councillors and the maintenance of trade sanctions imposed on the nation by western countries is testimony of warped priorities.
When this Government was sworn in, we hoped to see a return of our own domestic currency at the end of its four-year tenure.
Unfortunately, events on the ground suggest that even the incoming administration will have to put up with the multi-currency regime till the end of its term which is expected to be in 2018.
Overall, it was a lacklustre performance by the coalition government for it failed us as its citizens and to redeem the lost generation which mostly crossed the Limpopo risking the dangers of mugging, rape or crocodile attacks to look for perceived greener pastures across the border will require extraordinary approach.
Honestly, I do not believe the adage that “people get the government they deserve” applies in our case for we really deserved a more committed administration to lead us.
Thank you and God bless you.
Christopher Takunda Mugaga is the Head of Research for Econometer Global Capital, a regional finance and economics research firm. He can be contacted on: [email protected] or +263 772 340 353 / +263 776 266 062
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