Editor’s Memo….Faith Zaba
IT has been four years since that unforgettable day in November, 2017 when army tanks and armoured personnel carriers rolled into the streets of Harare in a movie-style.
The military intervention as it was described globally brought to an end the 37-year-long rule of Robert Mugabe.
This week, Zimbabweans experienced a cocktail of emotions as they reminisced on that November week, which was filled with fear, tension and excitement.
Internally, the take-over by Emmerson Mnangagwa was met with jubilation as Zimbabweans viewed this as a new dawn in their political fortunes. Externally, the international community accepted the intervention, which normally is contrary to regional and international norms.
November 18 was described by many as ‘Freedom Day”. It was a day that citizens and the security forces — the army and police which had been used by Mugabe to suppress people — found friendship.
When Mnangagwa took over on November 24 it was amid euphoria and high expectations for a new democratic dispensation and prosperity.
While there is a glimpse of success twinkling in the darkness, the fortunes of many Zimbabweans have not changed much.
There has been relative macro-economic stability. The Mnangagwa administration moved in quickly to stem a money supply fuelled economic crisis. This was done through taming aggregate expenditure and spending within the budget.
While there have been inefficiencies and spikes along the way, the general stance has been that of following a market-based approach to achieving economic stability. Over time, this approach should yield results in incremental gains.
The amendment of the Indigenisation and Empowerment Act to allow for more than 50% ownership by foreign businesses in local companies has opened up the country to foreign direct investment (FDI), although the figures are still low compared to other countries in the region.
Capacity utilisation has been improving, so has production figures in the mining sector.
The country has seen progress in various infrastructural projects such as progress on Beitbridge-Harare Highway rehabilitation, Gwayi-Shangani Dam, Kunzvi Dam, Beitbridge Border Post facelift, Robert Mugabe International Airport, Hwange 7 and 8 power expansion project and the Emergency Rehabilitation Programme Phase II where various urban and rural roads are being undertaken.
The introduction of the Dutch Foreign Currency Auction System last year has helped companies access foreign currency for importing raw materials and equipment, averting an industrial crisis. Additionally the operationalisation of the Zimbabwe Investment and Development Agency is expected to boost FDI.
The government brought back the local unit on the assumption that the economic fundamentals to support currency stability were firm. However, the currency has gone on to lose over 90% in value over the two-year period. In the process depositors have lost value. Salaries have been eroded and general economic growth slowed down. These adverse outcomes counter the growth in production driven by import substitution and firm exports.
Other economic shortcomings include: the arbitrary suspension of the Zimbabwe Stock Exchange by the government without stakeholder consultation which dented investor sentiments; corrosive consumption subsidies for fuel, electricity and other basic foodstuffs; unending farm, gold mines and property seizures by the state or its agents; failure to structure living wages for the civil service has led to serious brain drain and crippled service delivery in public services, especially education and public health; and failure to jail a single high profile case of corruption or keep it under control. The country is losing over US$1,5 billion annually to illicit financial flows and corruption.
The prevailing goodwill is fading. This is as a result of government’s approach to political, constitutional and economic matters. The violation of people’s rights remains a contentious issue.
Going forward, the government needs to improve the doing business climate, especially licensing, permits and taxation; reduce inflation to below 10%; table a Debt Repayment Plan; and privatise and list state-enterprises on the ZSE for transparency and corporate governance.