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“The economy desperately needs a clear winner and a peaceful ending to the electoral processes for it to stabilise and prosper.” These were the concise, yet profound words of Reserve Bank of Zimbabwe governor Dr Gideon Gono while postponing the announcement of the Mid-Term Monetary Policy.
This was also during the height of the campaigning season for the July 31 harmonised elections.
Now that the economy does have a clear winner, what are the future prospects?
The central bank chief recently said the economic prospects of this country were certainly bright in the medium to long term provided that a strong foundation for delivery was laid immediately.
“Electioneering is over, what is important now is a set of economic policies that are going to be pursued by Government. As long as these policies encourage productivity, investment, discipline, employment creation and well thought out implementation of the indigenisation and empowerment programme, the future looks bright,” Dr Gono said.
He said Zimbabwe needed to urgently mobilise investment capital from external markets so as to augment local resources while also engaging vigorously and tactfully external partners and all available sources of the much-needed capital.
The election result means a lot for the economy of Zimbabwe. The first being the predictability of policies and their certainty.
During the inclusive Government era, because of the differences and conflicting ideas that where held within Government, economic agents could not tell which policy was going to be successfully implemented, this caused much resistance in the participation of different stakeholders and especially foreign investors.
We now have to witness the winner enforce accountability and responsibility within the State, and be done with the “blame game” which characterised the coalition government.
The implementation of the indigenisation and economic empowerment drive, which anchored the campaign of the ruling Zanu-PF party, is bound to set the tone for the next five years.
The RBZ chief, however, says at this juncture Zimbabwe does not want any reckless implementation of programmes that have potential to scare away capital and investment.
“It is not too late to get our economy to sustained growth, achieve broad- based transformation and improve living standards for millions of Zimbabweans.
“Beyond the elections, what is required first is a unifying leadership, a unifying theme and a national vision that galvanises the collective energies of all Zimbabweans towards a common objective,” economist Mr Joseph Mverecha says.
“Our country is deeply polarised and a house divided will struggle to prosper.
“The greatest need for our country, post elections, is the need for a leadership that will rise above party politics to usher the nation into a new epoch of national building, based on a collective vision and a common cause.”
But beyond calling for a unifying theme Mr Mverecha outlines requirements to achieve growth.
At the macro-level, these include political and macro stability, economic policy consistency, domestic stakeholder engagement, addressing structural constraints, labour market reforms, strengthening institutions for economic management and international engagement (including debt and arrears clearance)
At the micro and sectoral levels, he outlines the following: regulatory and sectoral reforms, addressing endemic corruption, improving corporate governance, bureaucracy and red tape and implementation of positive incentive measures.
There is even a sense of cautious positivity from the West about the future prospects of the Zimbabwean economy post-election.
Head of the European Union Delegation to Zimbabwe Ambassador Aldo Dell’Ariccia said:
“We are waiting for a declaration of the High Representative of the European Common Foreign and Security Policy/Vice President of the European Commission, Baroness C. Ashton on the election in Zimbabwe.
“We will then see the political orientations of the new Government, bearing in mind that our goal is to support the Zimbabwean people in achieving a prosperous and democratic Zimbabwe.”
The economy needed a clear winner.
What Dr Gono was calling for was a system which ensures that policies can and are implemented with minimum friction.
The profoundness of the governor’s statement is really brought to the fore when one considers the ideological context that determined every kind of thought during the era of an intrinsically fractured unity.
The era of polarisation
Having achieved a modicum of economic stability following the introduction of the multi-currency system in the early months of 2009, further momentum stalled due to dissonance within the “Government of National Unity” (in the most flexible usage of the term) which typified debates on and implementation of economic policies.
The result of the fractured political state was an increase in uncertainty.
Uncertainty — in respect of an economic environment — has a number of negative consequences.
Economic experts contend that in worst case scenarios uncertainty tends to drive up risk premiums financial markets, raising the cost of borrowing for both companies and individuals.
It is also said to undercut productivity growth by decelerating the re-allocation of jobs, workers and capital, as such undermining medium- and long-term economic prospects.
It can also impede investment and hiring as companies become reluctant to make costly decisions that may soon need to be reversed.
These are some of the hallmark characteristics of Zimbabwe’s economic environment during the GNU years.
It boggles the mind, for instance, why the mere economic idea of achieving broad-based economic transformation should be fought over.
After all, we are all Zimbabweans.
And as such we should have an all-encompassing purpose: driving the growth of Zimbabwe.
Online Reporter