Recently elected President Emmerson Mnangagwa will appoint his cabinet anytime from now. Investors and the general populace are watching this keenly to see whether the new leader, touted as a reformer, will, indeed, institute much-needed reforms to the economy.
His term of office unfortunately begins at a time the economy is at the edge of the precipice. Inflationary pressures in the economy are evident to all and sundry if the wave of price increases witnessed in the post-poll period is anything to go by. The bond note, a fiat currency the central bank claimed had a par value with the United States unit, has lost 70% of its value to the greenback on the parallel market.
The currency is in free fall. The issuance of Treasury Bills and bonds is continuing unabated. Printing money has become the order of the day. Prices of goods are increasing at a frightening pace.
Industries are operating below installed capacity with the industry average just above 40%. The current account position is precarious.
Mnangagwa’s choice of Cabinet appointments will set the tone for his government. He has an onerous task to salvage what is left of the economy and place it on a path to recovery. He will need to tame the increasingly rising inflationary pressures in the economy and rein in currency devaluation. If Mnangagwa’s key result area is the economy, he cannot avoid the self-evident fact that far-reaching reforms are imperative. And radical ones too. The problems facing the economy need innovative, bold and uncompromising leadership. Among other deliverables, Mnangagwa has to make a decision on bond notes. Failure to deal with this will undoubtedly be the beginning of his political demise. It is clear to all and sundry that without radical reforms, Zimbabwe will continue plunging towards rock bottom.
Parastatals have since time immemorial been crying out for reforms. Mnangagwa needs to go beyond the lip service and take decisive practical action. Given the mounting evidence that the economy is indeed in peril, an able, qualified, credible and competent cabinet might help steer the economy in the right direction
Mnangagwa needs to completely overhaul the way government operated under his predecessor Robert Mugabe, whose ruinous policies destroyed what was once a vibrant economy.
Mugabe’s main weakness was appointing clueless and tired individuals well past their sell-by date into Cabinet and recycling them again and again. The recycling of the same individuals spawned corruption, patronage and downright incompetence that went unpunished by the nonagenarian. This partly led to the country losing billions of dollars through unmitigated rent-seeking by the ministers.
Mnangagwa has a golden opportunity to change wholesale the deleterious habit of appointing deadwood into cabinet and this time select young and knowledgeable technocrats desperately needed to resuscitate the economy which is in the doldrums. Gone are the days of appointing the loudest praise singers, big on bootlicking, but small on delivery.
Appointing a respectable, competent and lean cabinet, whose performance is measured against clear performance benchmarks would go a long way in instilling confidence in government and launch the country on the road to recovery. Anything short of that would worsen the multi-faced crisis currently pulverising Zimbabwe.