HomeLocal NewsZW$18bn stimulus package needs more clarity: Murefu

ZW$18bn stimulus package needs more clarity: Murefu

THE Employers Confederation of Zimbabwe (Emcoz) held its 38th congress last week at a time it marked its 40th anniversary. Israel Murefu (pictured) was re-elected as Emcoz president.
Acting business editor Kudzai Kuwaza (KK) caught up with Murefu (IM) to discuss his re-election, the impact of Covid-19 and the opaque ZW$18 billion rescue package by government to ameliorate the challenges companies have faced as a result of the Covid-19 pandemic. Below are excerpts:

KK: You have been re-elected as Emcoz president at the congress last week. What are your objectives for the second term of your tenure?

IM: I wish to thank all our membership and stakeholders for the support and confidence reposed in me culminating in my re-election. With this renewed mandate, I believe my work and that of my new executive committee is cut out for us. At the same time we are also going through exciting times at Emcoz where apart from the leadership renewal, the organisation is repositioning itself through a rebranding initiative that has resulted in us assuming a new look through rebranding and the coming into being of a new and refreshed logo. For more about the new look, watch this space as we will soon unveil the refreshed logo when we celebrate our 40 years of existence.

We have been working with our strategic plan as our campus, which guides our strategic thrust and direction. One of our key objectives is to establish coherent and strong collaborative structures with other business member organisations such as Confederation of Zimbabwe Industries, Zimbabwe National Chamber of Commerce, Chamber of Mines, Construction Industry Federation of Zimbabwe (IFOZ), Zimbabwe Farmers’ Union, Commercial Farmers’ Union, Bankers Association of Zimbabwe and many others so that we can, where possible speak with one voice regarding matters of common interest and generate more effectiveness in our lobby and advocacy agenda.

We also would like to see the Tripartite Negotiating Forum (TNF) platform being more effective in terms of ensuring that it has operating structures and procedures, as well as a full time secretariat that ensures that its resolutions are implemented or executed.

In addition, we would like to establish more regional structures of Emcoz so that we are as close and visible to our members as we can. During the course of the year we established the Bulawayo regional structure.

We will be moving to other regions soon to put up similar structures. We would like to increase the number and nature of services we offer to members especially those that may not have full human capital management capability and we also would like to strengthen and expand the scope of advisory and information services we provide to the membership and to attract more direct membership to Emcoz.

We would also want the voice of Zimbabwean employers to be recognised at international platforms such as International Labour Organisaiton, International Organisation of Employers, Sadc Private Sector Forum and the continental employers’ body, Business Africa, where we have membership or are a constituency.

KK: Emcoz has marked its 40th anniversary this year. What do you say have been the achievements and where do you think you could improve?

IM: The achievements of Emcoz are too numerous to mention. I will mention a few, such as contributing to the development of labour legislation, the creation of a legislated TNF and participating, the formulation of the Productivity Institute legislation, which is now a bill of parliament and participating as board members in its interim board of directors.

We contributed to the idea of creating a financial stimulus package to assist business with financial support to recover from the effects of Covid-19. We contributed to some of the Covid-19 national response measures and lobbying for relaxations of some of the business operating restrictions that came with Covid-19 related legislation.

We lobbied for a stabilisation of local currency to stem inflation and we are beginning to see some positive impact on that front. We also participate on the boards of some statutory bodies like Nssa, National Manpower Advisory Council, National Aids Council and others where we try and influence the strategic direction of those bodies and contribute to the improvement of governance of these institutions.

We still need to improve the operations and effectiveness of TNF and the issues of governance in the institutions I mentioned above and to ensure the Productivity Institute Act sees the light of day as well as seeing to it that the Labour Amendment Act is promulgated as law with a view to improving the ease of doing business and to expand our bouquet of services so that we also cover small and informal sector employers as long as they come to Emcoz through formal, organised and recognisable structures. We also need to find ways of improving the funding of Emcoz activities as membership subscriptions are not enough to enable us to execute our full mandate.

At 40 we feel that we have come of age and we need to chart a new trajectory that takes us to where we have not been before. We feel we are now a mature entity which can tap into its wealth of experience and leverage its human capital potential to deliver more value to our stakeholders.

KK: Your congress was looking at business recovering its operations after the advent of the Covid-19 pandemic and resultant lockdown. What survival remedies did you discuss?

IM: We discussed a variety of topics and explored in the main the area of leadership and how to lead and navigate the environment so as to reposition businesses for recovery in the new normal. We felt that leadership development and coaching leaders to lead and deliver value to stakeholders was critical because many of us had never, in our history, experienced a pandemic of this magnitude.

At best we had read or heard stories about pandemics but many, if not all of us had never come face to face with the stark reality of having to operate within and through a pandemic of this nature and so we were sharing experiences and how we could pull through so that we could quicken business recovery from the devastating effects of Covid-19.

In terms of remedies we explored areas around working from home policies, remote working, business continuity, as well as disaster management and recovery, stimulus packages, preserving jobs and employment, as well as employee wellness and mental health management arising from the effects of Covid-19 and to establish learning points and share experiences.

As it was a virtual conference we had the benefit of engaging facilitators and presenters from Europe, America, Asia and the African continent who shared exotic perspectives with us. It was a very enriching conference at least from a learning point of view and I am sure all participants derived value out of the congress.

KK: Government introduced the ZW$18 billion package to help revive the economy. Have your members benefited from it and what should be done to make the package more effective for business?

IM: The stimulus package, which is said to be about ZW$18 billion was a welcome development to business. A lot has been said about it. However, when you talk to many of our membership they are unable to confirm having been assisted or accessing the package, thereby raising the question as to who has benefited from it then?

Perhaps the central bank or the Ministry of Finance must unpack the beneficiaries and the amounts accessed or borrowed by sector.

Without that no one knows who has borrowed or has been assisted under this stimulus package. We need transparency around the package so that we know the resources are being availed to the intended beneficiaries. Businesses have a legitimate expectation of benefiting from the stimulus package and are keen to know who has been assisted and when they could also be assisted. The opaqueness currently around the package breeds suspicion as to where the funds were applied or who benefited and this does not inspire confidence among expecting beneficiaries. Also, not all that package is really cash as a significant chunk is guarantees but we are not sure where all the liquidity to lend is come from come from because liquidity is the key ingredient of any lending or borrowing.

Banks do not disclose who they have lent to or their borrowers because of confidentiality covenants surrounding client bank relationships so it is difficult to tell who the beneficiaries are. There seems to be a conflict between the monetary authorities objective of reducing or curtailing money supply in order to stem the devaluation of the Zimbabwe dollar exchange rate as well as bring down inflation on the one hand and the availing of liquidity in the economy to lend or support businesses via the stimulus package on the other ,and therefore a delicate balance between these competing twin objectives needs to be found so that both objectives are met or a win–win result is achieved.

KK: Finance minister Mthuli Ncube will present the budget within the next month or so. What in your view, should he do to ameliorate the plight of business?

IM: The minister must unveil measures that promote the ease of doing business and also ameliorate the financial plight of businesses in the form of tax and other non-tax incentives, enhanced and transparent stimulus packages which ensure that those businesses needing assistance more than others are prioritised especially the tourism and manufacturing sectors.

The budget must also stimulate both domestic and foreign direct investment in this country. The minister must also ensure that there is a small or no budget deficit so that government does not resort to borrowing from the central bank. If there is a surplus this must be a surplus that arises after meeting all key government and national obligations because a surplus that is realised after starving the needy areas of government is not a real surplus.

The country also has foreign obligations waiting to be paid and it does not assist the nation achieving a surplus when our creditors have not been paid. The foreign currency retention period must also be increased to say 90 days before compulsory conversion to local currency because business cycles which demand use of foreign currency by those who earn it are longer than the current retention period in some cases.

The minister must also widen the income tax bands for employees so that they are left with more money in their pockets to spend in view of the current high inflation and to avoid a recession because businesses survive through the spending of both individuals and corporates and so where employees have more money to spend it benefits businesses and ultimately government itself as it will collect more indirect tax.

The budget must also address the problem of a poor infrastructure as this presents an unnecessary cost burden on businesses. A good infrastructure enables the ease of doing business and promotes investment, which this economy badly needs.

Recent Posts

Stories you will enjoy

Recommended reading