24 January 2014

Zimbabwe: Analysts Tear Zimasset Apart

Zimbabweans should brace themselves for a lasting economic crisis as long as the ZANU PF government is at the helm, speakers at a panel discussion said Thursday.

The discussion, organised by rights lobby group Crisis in Zim Coalition, focused on the 2014 national budget and the government's ZimAsset economic blueprint.

"The overarching view from the panelists was that the budget and ZimAsset are just propaganda because ZANU PF has neither the funds to implement this economic blueprint, nor the political will to do so," according to Nixon Nyikadzino, one of the organisers.

"We wanted the Finance Minister and ex-finance ministers Tendai Biti and Simba Makoni to answer the questions whether ZimAsset is implementable on the current budget, but Chinamasa did not turn up," Nyikadzino said.

Speaker after speaker tore into the government's economic policies, with Biti saying that ZimAsset is anchored on the controversial indigenisation policy, which he said promotes capital flight rather than investor confidence.

Biti said the government's $4 billion budget lacks credibility and that while it identifies the problems facing the economy, the solutions it suggests only feed those problems.

"The biggest problem with ZANU PF is that they don't understand money and the economy. They are functionally illiterate. They think that money grows on trees," Biti told the meeting.

The former minister urged ZANU PF to humble itself and engage the international community for financial assistance, and also to revise its investor-hostile empowerment policies.

"We need to stem the tide of de-industrialisation, we cannot celebrate informal businesses," Biti said, adding that the informal sector was not taxable and could not be depended on as a revenue stream for Treasury.

Turning to Chinamasa's projection that the country's economy will grow by 6.1%, economist Godfrey Kanyenze said this is "grossly inaccurate and is illogical".

"Domestic arrears are not included in the budget, they are over $97 million. The budget doesn't have priorities, it contains projections and assumptions but the cash just isn't there," Kanyenze said.

Kanyenze said there was a need for the system to be completely overhauled but said he did not see this happening under the current set up.

"Any reform agenda cannot be done overnight, it takes years. Reforms will affect those who are benefiting from the current state of the economy, and they will not stand by idle," he said.

Mavambo/Kusile/dawn party leader Simba Makoni slammed the ZANU PF government for blaming targetted sanctions for the self-inflicted economic decline.

"We need to stop blaming other people for our own problems. Corruption continues to weigh heavily in our everyday lives, all the problems Zimbabwe faces are caused by politics and power struggles," Makoni said.

The former finance minister said the government needs to be receptive to new ideas and advice because "the government does not know it all".

"Problems can never be solved by their creators. We need the government to be open to advice from wherever it comes from," Makoni told the meeting.

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