“Zimbabwe is considered a pariah state and, no matter what we do, investment will not flow in.”
Zimbabwe Independent Comment
These stunning words, uttered in a rare moment of candour, came from Finance minister Patrick Chinamasa at the 2017 National Pre-Budget seminar in Bulawayo yesterday.
A pariah state is an outcast, a regime so reviled by the international community that its actions, policies and very existence constitute an affront to human decency. In short, Zimbabwe has now become, in many ways, the North Korea of Africa.
The minister is spot-on. Collapsing under a frightening capital account deficit, the country is being buffeted by a triple whammy of deflation, stagnation and low productivity. But these are the mere symptoms of a deep-seated malaise. We find it baffling that, while Chinamasa correctly observes that Zimbabwe suffers from adverse reputational risk, he lacks the conviction to prescribe and administer the proper medicine.
Tellingly, he revealed that the government had premised its overly optimistic 2016 economic growth projections on “an improved business environment capable of building confidence and attracting investment”. It beggars belief that the authorities are expecting tremendous economic growth — even as they work overtime to destroy the economy. Policy inconsistency, particularly with reference to the ruling Zanu PF’s doomed “flagship” programme of indigenisation, has spooked investors and greatly eroded the country’s capacity to attract meaningful levels of long-term equity investment. Closely related to policy inconsistency is the government’s brazen disregard for the rule of law and property rights. Capital is a fickle lover. No investor wants to venture into a primitive jungle where the whims and caprices of political leaders supersede the rule of law. Addressing the same gathering of legislators, Chinamasa went on to ask a useful question: What specific actions can Zimbabwe take to make things better? He knows the answers, of course.
Well, a good place to start is the World Bank’s recently released Ease of Doing Business rankings which show that Zimbabwe is regressing in its quest to create an environment conducive for business. Again, we see why our biggest problem is leadership failure. There are certain simple and straightforward interventions which do not require money. Reducing the bureaucratic red tape involved in registering a new company is one obvious example. The government does not need a cent to achieve this clear deliverable.
Another example is the scandalous refusal to reduce the number of police roadblocks. Here is the bottom line: a police state is a pariah state. Tourists are harassed, extorted and abused by corrupt police on our highways. It does not cost a cent to rectify this. The stubborn refusal by the authorities to address the roadblock menace shows that the government is not serious about rescuing the economy.
In fact, instead of correcting this anomaly, Home Affairs minister Ignatius Chombo is promising to equip police with electronic swipe machines to facilitate the payment of fines via bank cards. What cheek! An alcoholic needs to acknowledge his addiction before he can be helped. Likewise, Zimbabwe has to speak honestly about its problems before it can embrace true reform.