adminThe election has come and gone and one hopes Zimbabwe will now move beyond its now world famous permanent election mode and focus on rebuilding the economy. When politicians lose elections which they voluntarily signed for they should desist from making unsubstantiated claims hoping to precipitate economic crisis. Political stability is a prerequisite of economic prosperity. Since the election is over populist policies should be merged with reality to produce credible policies and avoid a direct ruinous fight with global capitalists (read the West).
Having played a critical role in Bhora Mugedhi, the youths expect a real “unique model of wealth transfer” and not just lip service. The people expect to see new beneficiaries of empowerment deals and not the same individuals grabbing all the opportunities presented by revolutionary programme. You cannot empower an empowered person. Empowerment transactions need to go beyond “small-scale maprojects ehuku and selling airtime”. We need to grow beyond that.
The magnitude of projects and funding needs to be stepped up from the US$2 000/US$5 000 that was available to more meaningful figures which can allow an emerging entrepreneur to set up a small-scale mine, water bottling plant or a tomato canning factory, etc. Struggling and sinking companies such as CAPS, Steelnet, Cairns, etc, are ideal candidates for empowerment transactions and funding should be availed to capable entrepreneurs to turn around such firms.
The indigenisation programme “unique model of wealth transfer” needs to be fine- tuned to focus on creating enabling environment for new entrepreneurs and new wealth rather than focus on parcelling out existing businesses. Localise the economy by focusing on creation of new indigenous entrepreneurs and grow small-scale businesses, import substitution, value addition on raw materials which are being exported.
As confirmed by the RBZ, the Zimbabwe dollar should not be introduced anytime soon. There are much more urgent economic fundamentals to be addressed before the country can have a respectable currency. The first step should be to set up a think-tank to brainstorm on the establishment of a local currency which will be used alongside multi -currencies.
The RBZ should be commended for quickly coming out and quashing false rumours that the Zim$ will be back soon. The markets desperately need directions and the authorities should step up efforts to reassure investors that Zimbabwe remains open for business and it is an attractive investment destination.
Investment promotion tours and exhibitions should be encouraged. Lack of information has distorted markets with false rumours that fuel price has gone up and South Africa has introduced visas.
A quick informal survey by GMRI Research indicates prices of petrol, cooking oil, sugar, salt, bread, vegetables have not changed from the pre-election levels.
Opportunities remain in Zimbabwe and this is the right time for investors to closely look at the market and get involved for the long term. The new Government needs to step up efforts to clear the IMF and World Bank debts and get into good books with those institutions.
Even when these institutions do not directly bring cash they act as political risk assessors for many international investors. Zimbabweans still need their support especially in terms of repairing infrastructure such as roads, rail way, water systems and power generation.
The Ministry of Tourism, Zimbabwe Tourism Authority, Zimbabwe Investment Centre, etc, now need to be more pro-active and visible and reassure the outside world that the country is calm and going forward. Information gaps provide opportunities for information distortion and out right propaganda.
While Zimbabwe looks East it should not ignore the West because the East is looking West. In terms of business and investment the country should seek to be a preferred investment destination and this is achieved via credible and predictable economic policies built on respect of property rights and empowering locals to share in the resources and opportunities within the economy.
While engaging the Bretton Woods Institutions is positive in terms of re-engaging the International community (read the West) those Institutions should not be allowed to impose some of their ideas which only serve multinational corporations.
Industrial capacity utilisation is around 43 percent having fallen from 57 percent in the previous year. A clear strategy is required on how to get this back to acceptable levels above 75 percent. The incoming Government strategy should be centred on creating new wealth rather than sharing existing wealth.
This will empower people while creating jobs and increasing productivity. Critical sectors such as agriculture, tourism and mining should be a priority area for the incoming Cabinet with increased mineral revenue accountability being a necessary confidence building measure.
Zimbabwe should seek to escape the third world curse of being an exporter of raw materials only to import back finished goods produced from the very same raw material. Value addition of raw materials such as platinum, chrome ore and rough diamonds should be the key focus area over the one to three years.
There is clear need to encourage buying local products, even if it costs 15 percent to 20 percent higher than imported ones, this may entail the use of tax incentives and subsidies to support select sectors. China is well known globally supplying cheap electronic goods and clothes etc, which have been found to be of inferior quality and workmanship.
The Government must have a think tank to work on making import substitution the official policy and look at how to best handle the eventual return of the local currency.
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