HomeCommentComment: Zim economy needs reforms

Comment: Zim economy needs reforms

ZIMBABWE’s economic freedom score is 37,6, making our economy the 175th freest in the 2015 Index of Economic Freedom, an annual guide published by The Wall Street Journal and The Heritage Foundation, a leading think-tank in Washington.

The Index covers 10 freedoms — from property rights to entrepreneurship — in 186 countries. For over 20 years the Index delivered thoughtful analysis in a clear, insightful and straight-forward format.

Zimbabwe’s latest score increased by 2,1 points from last year, driven by a particularly large gain in the control of government spending and improvements in six other economic freedoms, including on trade and fiscal issues.

Nonetheless, Zimbabwe is ranked last out of 46 countries in sub-Saharan Africa, and its overall score remains far below the world and regional averages. The country has also done very badly in many other economic rankings, including the Ease of Doing Business.

This confirms what just about everybody discerning already knows — the country’s economic climate is hostile and needs to change urgently.

This implies a paradigm shift, policy changes and structural reforms. It is imperative and urgent the economy is rescued from the cliff edge and tailspin into recession from which it might only bottom out after some years.

What needs to change in Zimbabwe first is the poisonous politics and unprogressive political culture. This will in turn inform the required economic policy and institutional changes needed to rebuild the economy on a different model to ensure recovery and growth. After near economic collapse during the hyperinflation and meltdown era in 2007/08, Zimbabwe has experienced five consecutive years of improvements in economic freedom.

Over the past five years, economic freedom has improved by 15,5 points, the largest improvement of any nation. The biggest score gains have been in monetary freedom and the control of government spending. A move to the multicurrency system brought a dramatic swing from hyperinflation to disinflation and now possibly deflation.

However, Zimbabwe remains one of the world’s least free and poorest economies presided over by a clueless, corrupt and incompetent regime. The tragedy though is that President Robert Mugabe appears hopelessly detached from reality or coldly indifferent to the intensifying economic spiral, poverty and suffering.

Instead of staying at home — like what all serious leaders would do — tackling pressing issues, he is gallivanting around the world with reckless abandon wasting taxpayers’ money while in dereliction of duty with impunity. His irresponsible skiving from work is now a national disgrace. In other countries he would be punished for that.

When it became independent in 1980, Zimbabwe had a diversified economy; good infrastructure, advanced financial sector and positive indicators.

It is now one of Africa’s poorest countries — courtesy of Mugabe’s economic illiteracy. And after decades of corruption and mismanagement, Zimbabwe now faces renewed economic failure amid company closures — de-industrialisation — and job losses on a massive scale. In fact, economic collapse and social instability are increasingly becoming a clear and present danger by the day.

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