THE National Economic Development Priority Programme (NEDPP), touted by government as the panacea to the country’s economic crisis, expires next mo
nth with almost all of its major targets missed.
Launched in March with claims of strong private sector participation, the programme was meant to reduce inflation, stabilise the currency and generate foreign currency. It promised to increase productivity, remove price distortions and reduce government expenditure. NEDPP was supposed to turn around the economy within six to nine months or at least steer it to a recovery path by year-end.
Perhaps its most ambitious target was to raise US$2,5 billion through the disposal of state companies and attracting foreign direct investments. The investments were to come from countries in Asia and the Middle East whom government says are our new friends after the fallout with the western world.
However, with a few weeks from the self-imposed December deadline, the NEDPP has met the same fate as other programmes launched with much fanfare but which dismally failed to revive the economy. Failures are already apparent because the programme has changed nothing — the economy is still well stuck in the mud with no prospect of recovering any time soon.
Inflation is still galloping ahead, food shortages are still rampant and foreign currency remains scare. The dollar, even without the three zeros, continues to lose value at an alarming rate. In the face of such overwhelming evidence of failure, what remain are claims by government officials about the success of the programme.
At times the claims come across as outright lies born out of desperation to save political careers in a crumbling regime.
For instance, the programme said the bulk of the targeted US$2,5 billion would come from “strategic partnerships” between government and foreign investors in specific parastatals.
No known deal has been clinched for strategic partnerships in ailing state companies like Air Zimbabwe, Zesa, Tel*One and Net*One as the programme proposes. If there were any such deals, they have remained just that — deals signed but never implemented.
In the meantime Zesa still can’t supply adequate power while Net*One and Tel*One are technically insolvent.
The commercialisation of the Cold Storage Company, which government said would be one of the major sources of revenue, has failed to take off. Nothing has been heard about the planned investment deals for Air Zimbabwe and the National Railways of Zimbabwe.
Analysts said NEDPP, like other programmes before it, was doomed from the onset because government dodged key problems in the economy, opting instead to compile a wish-list that was not supported by sustainable policies.
CFX economist Blessing Sakupwanya said the NEDPP was a noble initiative which was unfortunately thrust into an economy where fundamentals were skewed.
“The fundamentals are just not right and the commitment is not enough,” Sakupwanya said. “The issue of interest rates, money supply and investment policies are still outstanding.”
Perhaps the major reason for its failure is that it was based on the false premise that the economic crisis was caused by western sanctions. It conveniently ignored government’s destructive land reform policies that have severely reduced production and created a huge bill for food imports.
Apart from its lack of substance, NEDPP comes across as a half-baked programme cobbled together to give an impression that government was doing something about the crisis. Apparently not many people in the private sector have seen the NEDPP document.
As has become the norm, government wants to take the lead in every revival programme but lacks the will and commitment for the policies to work.
For instance, NEDPP talks about reducing inflation but government keeps printing money to fund its political projects like the senate whose additional burden on the fiscus comes in the form of salaries and new vehicles. There is now talk of building a new parliament because the old one has “become too small”.
Government wants to reduce its bloated expenditure but still manages to retain wasteful ministries like Chen Chimutengwende’s Ministry of Public and Interactive Affairs. For his part, President Mugabe has revived his globetrotting habit using scarce foreign currency.
The country has a serious foreign currency crisis but government finds it prudent to use the scarce resource to buy six fighter jets from China when it is obvious that there is no security threat to Zimbabwe.
It promises to increase manufacturing productivity but has failed to remove price controls on basics commodities like bread, mealie meal, flour and sugar.
NEDPP wants to lure foreign investors but government has shown a penchant for disregarding private property rights and rule of law. It wants investors to commit their money to a country where laws are changed at every sunrise and the judiciary is expected to be an extension of the government.
Government’s investment laws are equally repelling to investors. For example the fact that the state still insists on taking 51% in foreign mines seems to have scuttled NEDPP’s plans to increase foreign currency inflows by reopening collapsed gold mines like Conemara, Ran, Golden Kopje and Bell Riverlea.
It is the same reason why there have been no takers to reopen other mines like River Ranch (diamond), Hartley Platinum and LSM (copper) as the programme proposes.
Government’s failure to resolve the outstanding cases under the Bilateral Investment Protection and Promotion Agreements (Bippas) is an indication that it is not serious about investment protection.
Although NEDPP acknowledges agriculture as the backbone of the economy it fails to come up with strategies to increase productivity.
The programme had also sought, without success though, to revive agriculture this year through winter wheat cropping targeting 110 000 hectares as well as supplying adequate agricultural input for the summer crop. The winter wheat programme missed its target by 47%, translating into about 57 800h. The agricultural season is under threat with revelations that some of the fertiliser imported from South Africa was fake.
The NEDPP also sought to resuscitate two horticultural projects through the revival of Kondozi estate and the activating of Prochain Investment Flower Park project. It also makes projections that agriculture will grow by 11,5% next year including a production of 2 millions tonnes of maize.
However, these projections were made without addressing the recurrent disturbances on the farms and perennial shortages of inputs. Security of tenure issues have not been fully addressed despite the issuance of 99-year leases. The farmers who got the leases a fortnight ago represent less the 1% of the total arable land distributed during the chaotic land reform.
Even then the leases cannot be used as collateral to access loans from financial institutions. The uncertainty over property security still exists because the government can withdraw the leases with the farmers having very slim chances of seeking redress from the courts. But at least the NEDPP document does have some lighter moments — it wanted to attract back professionals who had left the country. The incentives for that project have not yet been announced.