adminLACK of consistency in the implementation of economic policies is a major problem that has affected the smooth recovery of the economy, analysts have said.
They said Zimbabwe had crafted a number of economic policies which were however not pursued to their conclusion resulting in lack of cohesion.
Some of the policies that Zimbabwe has seen include the Millennium Economic Recovery Programme, National Economic Development Priority Programme and Zimbabwe Economic Development Strategy and the running Zimbabwe Agenda for Sustainable Socio-Economic Transformation (Zim Asset).
In an interview with Sunday Business, economist Mr Prosper Chitambara said lack of policy implementation was the Government’s Achilles’ heel that is exacerbating the lack of transformation from one policy to another.
“The Government has come up with so many blueprints, polices and strategy documents that are so good but we are having challenges in implementation. We have been good at talking but very weak in implementation. We lack development champion. If you look at countries that have done well like Japan, they are good at implementing their policies,” said Mr Chitambara.
He said there was need for social cohesion and dialogue in the country for the economy to recover.
“Most of the policies don’t work because there is no buy-in from all the stakeholders. The other issue is that we don’t have the right priorities. About 90 percent of our budget goes to recurrent expenditure instead of development capital project,” said the economist.
He called on the Government to improve the investment climate.
Mr Chitambara said poor roads, high utility bills and taxes were making Zimbabwe uncompetitive on the global market.
“The high cost of doing business has eroded the national competitiveness of our economy. In terms of rankings for global competitiveness, we are actually in the bottom five. In terms of easy of doing business, we are in the bottom 10 and that goes to show how uncompetitive we are. It will be difficult for the country to attract meaningful and significant investment. Investors prefer to invest where the costs are low,” said Mr Chitambara.
He added that the high cost of borrowing was another issue which needed urgent attention.
“The cost of energy in Zimbabwe and the power outages have forced companies to run on generators and it is more expensive to rely on generators. Most machines in our industries require uninterrupted supply of power over long periods of time,” said Mr Chitambara.
In an interview, Minister of Industry and Commerce Mike Bimha was, however, adamant that Zimbabwe was on a recovery path as companies that were shying away from investing in Zimbabwe are beginning to show interest again.
“I have every reason to believe that the worst is over and the recovery is what we are seeing. It might be slow and not visible but I think we are in the right direction. Yes, we would like to speed it up and if we put our heads together, we will speed up the recovery,” he said
Cde Bimha said inquiries to invest in the country were coming from countries such as Russia, United Kingdom and France.
“Last time we had a 17-member business delegation from Europe making enquiries and wanting to find out what are the opportunities here and that’s encouraging. Two or three years ago, we could not talk about it,” he said.
He said other countries throughout the world have gone through similar challenges, Zimbabwe is facing, and managed to recover.
“I have been to China, and Indonesia and they tell me about their past that they also went through and they have now risen and got their act together. We went through the bad time and we are now poised for recovery.”
He said the Government had put in place measures to restore business confidence and support the local industry.
“There are so many interventions that the Government has put in place. We have engaged with institutions that we have never engaged with before. We have so many meetings with IMF and the World Bank which has never happened before and those meetings are not for nothing,” he said adding that sanctions were also being eased hence prospects of better co-operation with EU countries.
He said the Government had put in place measures to support local industry and protect it from imports.
Official data shows that over 4 600 companies have closed shop between 2011 and October last year, with nearly 64 000 workers losing their jobs.
Cde Bimha said all the unemployment challenges would be resolved if the economy is fully revived.
“All those problems can only be solved provided that we grow our economy and that’s what the Government is trying to do at the moment. If there are more players in the economy, we generate more employment and we have more goods and services to sell and there is wide revenue. But you see people who are working on short time because the economy will be shrinking,” he said.
Early this month Reserve Bank of Zimbabwe governor, Dr John Mangudya, came face to face with the grim reality of the collapse of the local industry when he toured some Bulawayo industries that were almost empty with little production taking place.
He toured National Blankets that used to employ over 1 000 workers and now has about 100 workers.
Dr Mangudya also visited former clothing giant, Archer Clothing company where the number of employees has fallen in the past years due to a plethora of operational challenges.
At one time the company had 1 600 workers, now it has around 300 workers.
Dr Mangudya said un-competitiveness and low productivity needed to be urgently addressed to bring a new lease life into the struggling economy.
A number of companies especially in Bulawayo have been placed under judicial management as they seek protection from creditors threatening to auction equipment.
The major companies affected are mostly from clothing, engineering, furniture, metal, textile, agriculture and commerce.
Online Reporter