Political will key to economic success

It’s been three years since that unforgettable day in November 2017, when army tanks and armoured personnel carriers rolled into the streets of Harare movie-style.

Editor’s MemO :Faith Zaba

fzaba@zimind.co.zw

The military had taken over key government institutions, including control of the police and intelligence services. They had also taken control of public radio and television stations. Zimbabweans experienced a cocktail of emotions — fear, tension and excitement — but they hoped for a new dawn in their political fortunes.

Robert Mugabe was put under house arrest and the army was demanding he quit after 37 years of catastrophic rule during which the country had been reduced to one of the poorest countries in the world.

‘Freedom Day’

On that fateful day, November 18, Zimbabweans came out into the streets across the country, in hundreds of thousands in a swift response to a call for a final push to oust Mugabe. Some described that day as Freedom Day; a day they were finally able to demonstrate without censure; a day they found friendship with the army and police, two arms of the state which Mugabe had used to suppress their aspirations for freedom.

Mugabe’s resignation on November 21 led to President Emmerson Mnangagwa’s swearing in on November 24. He took over amid euphoria and expectation for a new democratic dispensation and prosperity.

Fast-forward to November 2020, a lot has changed but not the fortunes of the people, with glimpses of success twinkling in the darkness.

Achievements
The country just recently started experiencing macroeconomic stability, as evidenced by slowing inflation, as well as fiscal and current account surpluses. The annual inflation rate in Zimbabwe fell to 471,3% in October from 659,4% in the prior month. It was the lowest inflation rate since January.

On the fiscal side, there is some financial discipline and prudence. The removal of the Indigenisation and Empowerment Act helped improve the country’s business climate and saw a 217% jump in foreign direct investment inflows to US$745 million in 2018. A number of large-scale mining projects in oil, gas, lithium, platinum, steel and gold mining are underway as a result of that reform.

The changes to company registration, tax payments and consolidation of investment agencies to form Zimbabwe Investment and Development Agency have seen Zimbabwe jump 15 places on the ease of doing business index from 155 to 140 out of 190 countries.

There have also been improvements in power and energy supply and slight improvements in public sector investments.

Similarly, other infrastructure projects such as the 100km rehabilitation of the Beitbridge-Harare Road and the refurbishment of the Robert Gabriel Mugabe International Airport will pay dividends in the future.

Failures
The flip side has however been all gloom. The country has experienced an increase in poverty levels, with over 92% of Zimbabweans now poorer than they were in 2017, while 7,6 million are projected to be extremely poor by the end of this year.

Unemployment has soared, as capacity utilisation across all economic sectors declined. The country’s social safety nets are non-existent. Lack of free market policies in foreign currency allocation and tight foreign exchange regulations have made the Zimbabwean dollar a weak currency, leading to endless foreign currency shortages for production purposes.

Widespread corruption in government and state entities has reached endemic levels. There is a general decay in public services due to poor working conditions for the civil servants.

Education and health sectors are in dire straits due to poor remuneration of staff and lack of funds for basic services. Divisive and toxic politics have worsened.

The nation is more divided along political lines than before, lacking unity of purpose. Failure to address investor concerns, including dividends repatriation, rule of law and guarantees to property rights, have impacted negatively on the country’s attractiveness.

Both domestic and foreign debts have been increasing without parliamentary oversight or accountability on the use of borrowed funds. The country still imports grain (wheat, maize and soya bean) worth over US$750 million every year despite multi-billion investment through command agriculture and the presidential input schemes.

But there is still an opportunity to implement economic and political reforms to ensure restoration of rule of law, property rights, observance of human rights and protection of freedoms guaranteed in the national constitution.

It all just takes is the political will of the new dispensation to straighten up everything.

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