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Unpacking the National Development Strategy-1

Vince Museve :Economist

EFFECTIVE leadership is really about having a leading idea which draws in the doers to make it a reality. A leading idea must be compelling, exciting, and inclusive and its benefits to the broader society must be obvious.

It must unleash the creative and innovative spirit of citizens in its achievement.

It must take its own dynamic growth as it becomes a constructive positive force which motivates especially entrepreneurs to make it a reality. It is against this background that we must evaluate and assess whether the recently announced National Development Strategy (NDS-1) will or can succeed.

Zimbabwe has had a total of 20 economic blueprints since 1980, all of them well articulated and well-intended, but as always, the inability to build the necessary capacity and resources to effectively implement, monitor and measure progress has resulted lack of any meaningful tangible developmental results on the ground.

Added to this, there have been no consequences for failure to deliver. Our economic blueprints have ended up being academic exercises or political rhetoric and election campaigning after which they all sit comfortably forgotten in the dustbin of history.

The NDS-1 is a 300 page document and it will be difficult to cover all issues involved in one sitting. One problem we may have is trying to do too much than focusing on leverage points.

It is also futile to spend too much ink describing how things will be done because, as far as I am concerned, the how is a dynamic creative process which will continually be influenced by both internal and external developments. Change is now constant, rapid and dynamic and one does not want to be caught trying to use old methods of doing things.

The document deals with the macroeconomic framework necessary, the intended drivers of economic growth and stability, food security and nutrition issues, structural transformation and value chains, infrastructure and utilities, housing delivery, human capital development and innovation, health and wellness, international engagement, devolution and decentralisation, crosscutting issues, financing and monitoring and evaluation. There is nothing new there.

The macro-economic objectives for the five-year period of the NDS-1 are:

Achieve an average annual real GDP growth rate of above 5%;

Maintain fiscal deficits averaging not more than 3% of GDP in line with Sadc targets;

Achieve and maintain single digit inflation;

Increase international reserves to at least six months import cover by 2025;

Establish a market determined and competitive foreign exchange rate regime;

Maintain public and publicly guaranteed external and domestic debt to GDP at below 70% of GDP;

Maintain a current account balance of not more than -3% of GDP;

Create at least 760,000 formal jobs over the five-year NDS-1 period;

Improve infrastructure development and investment in energy, water, sanitation, roads, health, education, housing and social amenities; and
Accelerate value addition and beneficiation of agriculture and mining production.

Nothing seems too ambitious here and we must always remember that GDP growth does not necessarily result in job creation and boundless opportunity. Fiscal discipline, low inflation and stable exchange rates are however critical to allow economic planning predictability and long term productive investment.

I have always argued that in order for us to create new results, it is important that we implement radical economic structural transformation (Rest). In my opinion, structural transformation and devolution and decentralisation are to me the critical transformational tools which can create new results. However, they must not be dragged by toxic politics, an issue which remains an albatross to meaningful progress.

We have to fundamentally restructure our GDP so that its contributors add more value. Our continued reliance on primary products for export earnings arrest our potential and externalises potential internal wealth, job and income creation opportunities. We have to modernise and industrialise so that, as much as possible, we manufacture what we consume and export more manufactured products which currently make a mere 5% of our exports. An industrial revolution should therefore be at the centre.

According to the strategy: “Structural transformation is anchored on promoting inclusive and sustainable economic growth, full and productive employment and decent work for all and targets to achieve higher levels of economic productivity through diversification, technological upgrading and innovation, with a focus on high-value added and labour-intensive sector.”

That is in a nutshell the industrialisation we seek!

The strategy seeks to increase secondary products share of GDP to 15% by 2025 from the current 10,6%. Nothing radical here! My preference would be to continually reduce primary product reliance to 20% in total. The share of value added exports is projected to US$1,3 billion by 2025 from the current US$720 million. This is still too low, at least 50% of our exports should be processed or manufactured goods given our prodigious idle resource base. At times, it’s better to aim rather high and succeed anyway if targets are not met.

Further “priority will be to develop and strengthen already existing value chains, beneficiation of minerals and in the process promoting linkage of SMEs with large corporates. The strategy will also prioritise decentralisation of industrialisation initiatives in line with the policy thrust of devolution and decentralisation. Value-addition and beneficiation industries will be located in specific provinces and districts where the endowments are located.”

The value chains identified include agro-based value chain; pharmaceutical value chain; bus and truck assembly value chain; iron and steel and general engineering value chain; and plastic waste value chain.

Also included are mineral beneficiation value chains which include: gold ore to bullion processing; diamond cutting and polishing; base metals (nickel, copper, iron, cobalt) recovery from PGMs; coal to coke; and chrome to ferrochrome.

Remember, I am dealing with the what here and not the how. The above are certainly areas which all economists have been continually encouraging. So the strategy is correct.

If we then look at the devolution, it is critical for provinces to be autonomous economic hubs that maximise own factor endowments. This requires localised rapid modernisation and industrialisation, a subject matter which I have widely written about before. This requires visionary leadership at provincial level and the capacity to implement and monitor large scale industrialisation projects. That capacity has to be built and depoliticised! Added to this will be the necessary research and quantification of what is possible within each province.

Devolvement of powers and responsibilities to competent provincial/metropolitan councils and local authorities is an ongoing intention.

“Devolution seeks to make the system of governance community based and people centred by enhancing community participation in making decisions on local development issues that affect them and in the exercise of governmental powers.”

Devolution is not only about the devolvement of political power, but economic power as well thus unleashing the potential of provincial economies. The production of self-driven provincial development plans in line with the NDS-1 strategy must therefore, be the first priority.

The question is will the above lead to the transformation that we seek? The answer is it will all depend on the politics. The political culture and architecture inherited from the Mugabe era is all about control of people and resources and it certainly has not ended. A free society creates more value through innovation and big dreams.

The NDS-1 is therefore not a bad attempt at all. Emphasis must however be on inclusive participation and benefit. Zimbabwe’s economic potential has unbound possibilities which have been stifled by lack of imagination and bad politics. If this continues I am afraid we shall once more see a good strategy spoilt by bad politics and lack of capacity to implement.

But as I always tell my colleagues and those who may bother to listen, hope is not a strategy.

Musewe is an author and Harare-based independent economist. These weekly New Perspective articles are co-ordinated by Lovemore Kadenge, an independent consultant and past president of the Zimbabwe Economics Society. – kadenge.zes@gmail.com or mobile +263 772 382 852.

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