NEDPP yet another of government’s dead ducks

Dumisani Ndlela


GOVERNMENT’S ambitious economic revival programme announced last week in a bid to alleviate the numerous hardships besetting Zimbabwe has failed to find buyers even among the most optimistic observers.

The government’s dismal po

licy record and the history of economic programmes clearly show that the critics of the National Economic Development Priority Programme (NEDPP) may well be justified in thinking the latest initiative amounts to more of the same.

Since Independence in 1980, Zimbabwe has had no less than 10 economic growth and poverty reduction-related programmes. These include Growth with Equity (1981), Economic Structural Adjustment Programme (1991), Poverty Alleviation Action Programme (1994), Zimbabwe Programme for Economic and Social Transformation (1996-2000), Zimbabwe Millennium Economic Recovery Programme (2001), the Ten-Point Plan (2002), the National Economic Revival Programme (2003); and Zimbabwe: Towards Sustained Economic Growth — Macro-Economic Policy Framework for 2005-2006.

The NEDPP launched last week therefore adds to a plethora of failed economic agendas the government has embarked upon to rescue a faltering economy.

The NEDPP, sold as a joint economic revival effort by government and the private sector, is designed to create economic stability within the next six to nine months.

The challenges are enormous: Zimbabwe has experienced a major humanitarian emergency due to the deteriorating economy and immense policy constraints aggravated by the spread of HIV and Aids.

Inflation reached an all-time high of 913,6% year-on-year for March, with what economists describe as “structural unemployment” being estimated at nearly 80%.

Major foreign currency and fuel shortages have dominated the crisis as well as shortages of basic food commodities.

The NEDPP was formulated by the government through the Zimbabwe National Security Council (ZNSC), chaired by President Robert Mugabe who in July 2004 announced what he described as an “evident revival of our economy” during his state-of-the-nation address.

Under the NEDPP, the government plans to mobilise US$2,5 billion within the next three months, boosting efforts to stabilise the economy, reduce inflation and increase agricultural production.

What’s more, the programme will help enhance savings and trigger investments inflows.

What is not clear is how the programme will raise such a huge amount of cash without support from external financiers, and especially in the absence of balance-of-payments support from the International Monetary Fund.

Indications are that the NEDPP, like its predecessor programmes, will fail simply because it has not dealt with the basic reasons behind the country’s incredible economic decline.

These include skewed economic policies, a breakdown of the rule of law, and government’s destruction of the commercial farming sector, previously the bedrock of the country’s economy.

The attitude of government, which became apparent at the launch of Nerp, was that sanctions targeted at President Mugabe and his inner circle for alleged electoral and human rights abuses, are the main cause of the economic crisis, which has seen gross domestic product contracting by a cumulative 35% over the past six years.

The latest document does not acknowledge that agricultural production has shrunk because of government’s controversial land reforms, which triggered a tail-spin of export figures.

Gideon Gono, the once-affable-but-now-crabby central bank governor apparently put out by frustrations to his mandate to turn around the country’s struggling economy, gave the programme an early endorsement.

“This is different from previous initiatives,” Gono told a press briefing during the programme’s launch. “We have a clear vision of what needs to be achieved and we have deadlines by which certain deliverables must be achieved,” he said.

But Gono’s efforts towards economic revival have encountered immense resentment from top ruling party and government bigwigs, many of whom have profited from the crisis through abuse of access to fuel and other commodities in short supply which they have sold on the black market at exorbitant prices.

The RBZ, under the Agricultural Sector Productivity Enhancement Facility, disbursed $5,59 trillion to farmers to increase productivity, but most beneficiaries, among them ruling party bigwigs and cabinet ministers, did not utilise the cheap funds, attracting 30% interest, for intended purposes. Banks are charging interest above 800% for borrowings.

A similar facility providing fuel to farmers has been equally abused, with top ruling party members and their cronies being implicated.

Buying diesel at $23 000 per litre, they sold it on the black market for around $210 000 per litre. Two top ruling party members, including a central committee member, have been arrested for abusing the scheme, but cabinet ministers, some of whom received amounts “large enough to irrigate vast farmlands”, have remained free despite being implicated.

The party officials have also been given access to mealie-meal by the Grain Marketing Board, a government-owned company with a monopoly over the buying and selling of grain in Zimbabwe.

After buying the mealie-meal or grain at subsidised prices from the GMB, ruling party and government officials resell the product to consumers at exorbitant prices, often on the black market.

This has resulted in missed targets, increased money printing which has fuelled money supply growth and consequently inflation.

Also, a major rift between Gono and Finance minister Herbert Murerwa became apparent after recent reports by the Zimbabwe Independent that the two had clashed over Gono’s mandate in the fight for economic revival, with Murerwa alleging the governor was encroaching on his mandate.

The latest programme seeks to clip Gono’s wings.

For example, the NEDPP was formulated by the ZNCC chaired by President Mugabe. The ZNCC will be supported by the National Economic Recovery Council, chaired by Vice-President Joice Mujuru, believed to have been a chief backer of Murerwa’s motion limiting Gono’s influence in the revival agenda.

The Nerc, with a technical committee chaired by chief secretary to the Office of the President and cabinet, is composed of government and private sector representatives, and will take charge of the implementation process of the new economic programme.

Economic Development minister Rugare Gumbo, said: “The monitoring of progress in the implementation of projects and programmes is being effected at the highest level of government. The management and leadership skills in both the public and private sectors have been fully mobilised to ensure successful implementation of NEDPP.”

Gumbo said NEDPP would aim to restore investor confidence, to rehabilitate key infrastructure destroyed through neglect during the current economic crisis, drastically reduce government’s domestic and foreign debts as well as restore a positive image of the country, battered by reports of the country’s human rights record and political and economic turmoil.

“We have the right formula,” Murerwa said, cognisant of the failures of past programmes. But will he get it right this time? Nobody is holding their breath.