It’s a foregone conclusion that there is state capture by those who are in authority which has caused diminishing confidence and trust, hence the resultant capital flight
Government has to curb a rising fiscal deficit by embarking on aggressive austerity measures and trigger the supply side of the economy, prominent businessman Shingi Munyeza has said.
Munyeza told businessdigest last week the biggest scare for the economy was rising domestic debt financed through the issuance of Treasury Bills. “The biggest scare is the accumulation of the domestic debt being funded through Treasury Bills,” he said.
He said there was need to properly manage the country’s debt situation.
“Proper management of the external debt by concluding processes with the Bretton Woods institutions,” Munyeza said.
“It’s of no use to further analyse the status of our economy but I would only do so to highlight possible solutions and way out of this mess we find ourselves in.”
“From the onset, our economy needs visionary leadership that takes it back to a democratic developmental state, giving it a pro-poor emphasis. This overall policy framework gives it a non-market mechanism which promotes savings and investment. We no longer save which is always the initial and sustainable indication for investment and economic growth,” he added.
The Reserve Bank of Zimbabwe had issued Treasury Bills to the tune of US$2 billion as at December 2016.
Munyeza, a former chief executive of hospitality group African Sun Ltd, says there is need to bring the country back to a democratic developmental state and make it autonomous to pressures of interest groups as well as free from state capture.
“It’s a foregone conclusion that there is state capture by those who are in authority which has caused diminishing confidence and trust, hence the resultant capital flight,” he said.
“Politics is responsible in spearheading structural change and social transformation.
“In our case our politics have been toxic and factional, hence eroding social cohesion.
“This is a recipe for economic decline and lack of development. The state has become partisan engaging its social partners which has further entrenched state capture,” Munyeza pointed out.
He said government has to curb a rising fiscal deficit by embarking on aggressive austerity measures which will trigger the supply side of the economy, proper management of the external debt, re-engineering of the entire private sector to make it more productive, introduce value addition, import substitution and being export oriented. This, he said, would require a relook at the country’s investment policies to allow for quicker and easier flow of foreign direct investment.
“There is a desperate need to have an aggressive reform agenda on the public enterprises in order to make them positively contribute to economic growth through restructuring, commercialisation and privatisation. At the moment they are mostly in a state of capture and abuse. We need to immediately implement the corporate governance charter that was promulgated to curb corruption,” Munyeza said.
“We need a structural transformation of property rights starting with the conclusion of the 99-year leases and implementation thereof. The Land Commission needs to put closure to the land audit so productivity can be guaranteed.
Finally, there is need to align all laws to the constitution without further delays.”