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Dr Gift Mugano —
Let me start by thanking the Almighty for taking us into 2017, giving us another year to worship him and save our great country – Zimbabwe! Wish you a happy and prosperous year Team Zimbabwe!
If we had watched economic developments closely from 2013 to date, we can conclude that the succeeding year is more difficult than the previous year. It is rightly so because the problems of the previous year have been spilling over to the next and this ultimately builds a bigger problem – what we call in economics a vicious cycle or multiplier effect. By the same reasoning, 2017 will be the most difficult year and the same will apply to 2018.
We have built a trend which is serially correlated for the past years which we need to break as we start 2017. Without elaborating much (since we all know the narratives), we have allowed corruption to continue unabated; based on our trade agreements, we have turned our economy into a dumping site both for the region and global players.
We have also disagreed on a number of aspects like bond notes, indigenisation and debt clearance strategy. And finally, our politicians have not spared us – politics continued to unfold within the ruling party at the expense of development.
These issues have built and will continue to build an economy on a downward trajectory as we have already noticed.
In 2017, we need to decisively deal with corruption. We have lost investors because of corruption. We have lost billions of dollars in the mining sector. We have seen products on statutory instrument 64 (SI 64) flooding our streets and some are in the shops because of corruption – they are being smuggled into the country and corruption is facilitating the process. We all have read the Auditor General report on how corrupt our parastatals and Government Department and some ministries are.
The reality of the matter is that monies have been swindled, wasted on an undeserving organisation/individual resulting in poor service delivery and wastage of the resources while in the process office bearers would have made money. We have seen houses of poor people being destroyed on the reasoning that they are illegal structures yet in many cases their house plans are approved by the responsible authorities.
This is happening on the back of corruption. The list is endless. As we all can see this trend is not going to help us in building a better Zimbabwe. Rather, it is synonymous to putting poison on a bed ridden patient.
I cannot write a book on how to deal with corruption. We have all the systems and institutions which can help us eradicate corruption.
They should do their work without fear or favour!
On trade agreements; we created a big problem for ourselves by signing free trade agreements (FTAs) in various arrangements (that is, Common Market for Eastern and Southern Africa, Southern African Development Community, for example) without a strategy on how we can utilise the market access created.
Mexico, for example, signed an FTA with the United States of America and went on to sign a bilateral trade agreements with the Germans and even went further to pursue the Germans (who were restricted to export their motor vehicles to the USA (by the USA) to invest in car manufacturing plants in Mexico aimed at the USA market. Mexico is exporting cars to the USA big time because they signed the FTA with a strategy!
In SADC, South Africa is signing FTAs with a strategy. Because they are cash rich, they use resources to support their companies invest in the region wherever they have FTAs. Over and above resources support, they also invest in research for untapped export markets by product. In 2014, I actually got a full time job in South Africa which I turned down. My key task was to scan for export opportunities for South African companies in all the regions it has FTAs with using a dashboard analysis.
When I look at our own situations here, without being personal, I must admit that we are not being sincere to ourselves.
In some cases, to be frank, I have become a victim at the hands of my own colleagues in my country (in some ministries/departments) whenever I try to assist issues which I have expertise on yet in South Africa they go even beyond their borders to build not only a directorate of experts but also use them in championing their economic development.
At the end of the day, we would love to blame the South Africans for the skewed trade in their favour but they are doing themselves a good job. The Pick n Pay and Shoprite’s of this world are not finding themselves in Zimbabwe and Zambia, respectively, by accident!
In 2017, we need to copy the Mexican strategy. Zimbabwe has geographical/locational advantages. Its central location in SADC is an asset which must be tapped from a trade perspective. I noticed that Honourable Minister of Macroeconomic Planning and Investment Promotions Dr Mpofu is playing a right tune on attracting investments. The Special Economic Zone bill was signed into law.
I hear that he is planning on investment road shows. My advice to him is two-fold.
First, the Minister and his team must always emphasise that the market size of Zimbabwe is 600 million people not 13 million people and Gross Domestic Product (which is measure of income) is $1 trillion not $13,8 billion. This is rightly so because the market stretches from Zimbabwe to SADC, COMESA and Eastern African Community after signing the tripartite FTA. Zimbabwe then offers geographical advantages to reach this market. This is also powered by a strong human capital base together with an improving business environment courtesy of the easy of doing business reforms!
Second, Honourable Mpofu and his team must head hunt investors targeted for huge projects like ZISCO, car manufacturing or any processing of any kind aimed for exports to the region and abroad. The Mexicans went for German car manufacturers. That was enough for them. Here I am emphasising hunting investors for manufacturing not extractive – mining. World Bank studies show that over 90 percent of investors coming to Africa are going into extractive.
On dealing with trade matters, I am expecting the Minister of Industry and Commerce to promulgate the local content regulations (LCR) into law. The LCR aims to encourage local production by encouraging companies (through legislation) to support local production and buy locally produced goods. This will help to extend the gains of SI 64 without violating any trading protocols as the LCR is in sync with World Trade Organisation provisions.
Turning to incessant disagreements which formed the order of the day in 2016, we must admit that some of our disagreements last year were genuine especially on bond notes and indigenisation thrust. What lacked in these particular policies was national consensus. A policy is useful and easy to implement if there is national consensus. My advice to policy makers this year is that let us consult sufficiently on policies not for the sake of consulting but genuine consultations which sees Government taking into account people’s views. It is of no use to impose a policy on people because they will not implement it. We need to be united this year and work together as Team Zimbabwe. Unity, respect and togetherness should be our gospel this year.
On politics, politicians from all the political divide must spare us. We are not in 2018 yet please. Economically, we all know that economic agents, that is, local businesses, individuals and investors naturally goes into a wait and see attitude whenever we go into election mood. We don’t want to go into election mood in the course of this year. Zimbabwe’s economic affairs is not in the right shape to be slowed down by any means.
Everyday counts. The same applies to our ministers who are both twitter and vocabulary wizards. They must spare us this year for God’s sake.
This is not the year of waking up early morning and digger for big vocabularies which will be used to donate as a dynamite to a fellow cabinet colleague. Investors do not come to a country where educational prowess is now being used as weapon of mass destruction.
Dr Mugano is an Economic Advisor, Author and Expert in Trade and Competitiveness Strategy. He is a Senior Lecturer at Zimbabwe Ezekiel Guti University and Research Associate of Nelson Mandela Metropolitan University. Feedback: +263 772 541 209 or [email protected]
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