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Zim economy prospective or doomed?

For the hopefuls, Zimbabwe is a golden goose yet to lay the right golden eggs. For the moderate minded, Zimbabwe is neither barren nor provident. It is a country with everything, but simply giving nothing. For the curious minded, the adventure to keep waiting for the silver lining on Zimbabwe’s seemingly endless economic dark cloud remains as exciting as it is challenging.

Tonderai W Munengami

But does this rainbow of mixed sentiments end with a pot of gold?

For slightly over 40 years, Zimbabwe has been sovereign in political terms more than economic terms. The only time the economy truly enjoyed freedom was when Rhodesia became Zimbabwe. Then, the economy was young, promising and larger than life. It was popular and trusted as the bottomless basket of harvests for the nation and African continent. It served the world markets with quality and class. For its time, it was a fairy-tale even the future coveted.
As the world underwent a major facelift from the ugly days of wars and colonisation to contemporary civilisation, Zimbabwe’s dream economy gradually lost its way. Today, global dynamics continue to shift as the world come of age. The world order is changing. Fresh economic frontiers have emerged, with Africa and the world joining hands without Zimbabwe.

Events of the last few years leading to the sudden conception of the second republic attempted to rescue the economy with vain promises. The promise that the economy was finally going to emerge from the woods was vain.

The promise that the economy had reached the end of the tunnel was vain. Nothing inspired the economy to life. Not even the upbeat posture of those who authored the second republic or the exciting atmosphere of hope and redemption the second republic created. It remains just as disoriented now as it was subconscious then and now even closer to the fringes of modern civilisation.

What remains true about Zimbabwe’s economy is its potential. The potential to recover and standout. What’s puzzling about Zimbabwe however is its affairs and welfare.

Human capital is to Zimbabwe what oil is to the Arab world. The nation is endowed with human resources of all stripes from fresh graduates to seasoned experts. It’s a society teeming with literacy. From that abundance of literate and able bodied human capital, only a handful is serving the economy. The rest are without jobs or known business ventures.

After literacy, there is land. Arable and otherwise. Land defines and forms Zimbabwe’s heritage of success and failure. It also represents the nation’s history of wars and freedom. Land founded Zimbabwe’s economy and land collapsed Zimbabwe’s economy, leaving it spineless and permanently ill. Those charged with governance need to consider redistributing the land to those with capacity to add to the bread basket of the nation. Most former commercial farms are now lying idle in the hands of unproductive personalities in as far as Agriculture is concerned.

On its part, the present day government did and continue to do everything possible to compound the unemployment and land situations. Policies and legislations deformed from head to toe keep delifing the nation’s labour, entrepreneurship and farming prospects. The government need to consider formulating policies that wear human face and promotes direct foreign investments so as to address the catastrophic disaster of our time — unemployment.

From a sober perspective, the economy has transformed from a structured and formal ecosystem to an informal maze of ventures underpinned by corruption and narcissism.

The new order has created a viral pandemic of economic challenges. Major corporates have closed, downsized or migrated to places outside Zimbabwe. The majority of the world has lost truth and faith in the nation, leaving the economy without the blessings of the global market.
The bad blood between Zimbabwe and the West is too thick for the nation to obtain international aid easily.
Locally, financial institutions are sceptical to blindside the credit risks with most credit applicants. Obtaining loans to start or keep businesses afloat is challenging.

Public enterprises are the vanguard of most state misdemeanours with corruption, poor governance and unaccountability, bleeding the economy to near death.
A cocktail of legislations and policies to manage the money situation has managed nothing more than creating a major disaster. The greenback is carefully managed for economic gains. Local currency is short on the market and available for a fee. Rates are souring, reaching new and frightening heights daily. Businesses are struggling to cope and left without choice, but to exploit consumers. The local market operates without functioning regulations.
Competition meant ordinarily to protect and promote consumer friendly prices and quality of commodities and services is now the currency of public abuse. Monopolistic tendencies are rampant and especially from private entities.

Key national resources are neither building the nation nor serving the nation.Government expenditure on key economic enablers is pathetic. Infrastructures desperately needing uplifting continue to rot. Development of new features to keep with modern demands remains a distant dream.

In this regard, the government need to consider engaging in various forms of Infrastructure public-private partnerships (PPPs) so as to uplift the decaying infrastructure such as roads, railroads, sewer and water systems only to mention, but a few.

Public trust is scarce with willing investors both foreign and local remaining reluctant to work with and for the economy. Government position on property rights and retention/repatriation of earnings continue to haunt and harm the economy from attracting foreign direct investment (FDI).

In the face of this wilting economy, the government purse continues to suffer. Major income streams have dried and the little remaining are simply tributaries.
An informal economy is a haven of unregistered entities. Most of them are small and medium in size. With informality comes the bad habit of escaping responsibility. The responsibility to submit income tax, corporate tax, value-added tax, licence renewal fees, etc.

With informality as the mainstay of the nation, the accuracy of monitoring and evaluating economic developments is challenged.

GDP figures and positive/negative growth trends are difficult to monitor. Greed, sloth, and fear must be eliminated from both the private sector and government agencies so as to enable the economy to tick again based on transparency and integrity.

This has largely been the economy of Zimbabwe in recent memory and while hope remains palpable even amidst the Covid-19 black hole, Zimbabwe remains a story of conflicting tales.

Munengami is a public accountant (RPAcc), fellow member of the Chartered Governance Institute (FCIS) and managing partner in Pertonady Public Accountants. — info@pertonady.com. These weekly New Perspectives articles are co-ordinated by Lovemore Kadenge, immediate past president of the Zimbabwe Economics Society . — kadenge.zes@gmail.com or mobile +263 772 382 852.

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