BANKERS Association of Zimbabwe (Baz) immediate past president George Guvamatanga has called on government to ensure policy consistency and clarity in order to attract foreign investment.
At a Southern African Political Economy Series Trust (Sapes Trust) organised International Conference on Zimbabwe, Guvamatanga this week said policies must also be clear cut and straightforward to ensure there is no room for corruption.
“Most of these policies give discretion to implementers and we need clear policies that are backed by legislation,” he said.
“We don’t want to hear that we are flexible or this minister is flexible. If he is not flexible, the question is how to make him flexible.”
Guvamatanga said policy inconsistency and lack of clarity continues to scare off potential investors.
“No one gives you money because they feel sorry for you or they like you, but because it makes investment sense,” he said.
The top banker said policy consistency moulds the country’s reputation, hence Zimbabwe’s poor rankings in terms of doing business.
“Because we do not have enough domestic savings, we have to borrow and when you want to borrow there is this thing called country risk,” he said.
Currently, Zimbabwe’s country risk is high due to policy inconsistency and lack of clarity as well as repeated unconfirmed reports on the possibility of a quick return of the Zimbabwe dollar.
Guvamatanga insisted his interactions with top government officials and other bankers pointed to a continued multiple currency regime for the foreseeable future.
He said other economic variables such as the high cost of labour, strict laws on hiring and firing of employees needed to be reviewed in order to make industry viable.
“People are crying about deflation, but I say we need some of these prices and costs to be corrected,” he said.
Confederation of Zimbabwe Industries president Charles Msipa bemoaned poor access to finance, political instability, poor infrastructure, corruption, restrictive labor legislation and restrictive government bureaucracy as the key factors eroding competitiveness.
World Bank country economist Nadia Piffaretti said Zimbabwe needed to manage its high country risk by increasing policy consistency, having strong prudential supervision of its financial services sector and correcting all fiscal slippages.
She said the country also needed to grow domestic savings and increase capital internally. Piffareti said Zimbabwe needs to maintain macroeconomic stability by adapting a shorter job creation programme to turn around its economy, estimated to grow by around 3% this year.
“For the short-term economic stability and job creation, there is need to improve the business environment for the formal economy as recovery of the formal economy in my view is a key pillar of getting Zimbabwe running,” Piffaretti said.
“On the mineral sector, you should go after mineral rent; that is the difference between costs and prices so the higher the prices and the lower the costs, the better.”
She also said rentals need to be managed to levels that are sustainable for long term investment.
US Ambassador to Harare Bruce Wharton said the country has strong potential for economic growth because of a strong resource base and human capital.
“Right now don’t look East, West, South or North, but look inside your own country,” Wharton said.
He said Zimbabwe’s key growth opportunity areas include information technology.
“There is a huge potential for IT (information technology) in terms of applications and software,” he said.
“ICT (information communication technology) can support existing industry in Zimbabwe such as mining and agriculture and it is not capital intensive.”