14 August 2014

Zimbabwe: Govt Should Bail Out Economy

editorial

ZIMBABWE'S economy is still nursing a troubled past and the economic wounds inflicted by a decade-old crisis, which subsided briefly but took a new trajectory after dollarisation in 2009, and these are yet to heal. This was evident from President Robert Mugabe Heroes' Day address this week, in which his admission that the economy was in a quandary was veiled but clear.

Hardly a month ago, President Mugabe's said the economy was on a recovery path following the introduction of the integrated result-based management, which would see all government and quasi-government institutions coming up with their strategic action plans. Obviously, this left the population wondering: Could the President have been referring to another economy, not ours?

The key economic indicators in our economy are depressing, and there is certainly need for hard work on the part of both government and the private sector to take it out of the doldrums. We accept that President Mugabe did acknowledge in his address, that the expectation among Zimbabweans for economic revival is predicated upon his ruling ZANU-PF party manifesto which, among other things, promised to create two million jobs in the economy once voted into power.

ZANU-PF went on to win with an overwhelming majority, but the restive population which had been lured by the party's promises has become despondent -- very little if anything has been achieved in terms of the party's electoral promises since bouncing back to power on August 1, 2013.

On Heroes day, President Mugabe promised the nation that government had "begun in earnest to implement the Zimbabwe Agenda for Sustainable Socio-Economic Transformation" to fulfil his party's electoral promises. He indicated that the economic blueprint would help government expedite national development through the leveraging of proceeds from domestic natural resources combined with available international resources, and that this has enabled government to begin to implement various projects and programmes.

"This will inevitably promote, with increased investment, more employment opportunities, ultimately improving the standards of living of our people," said President Mugabe. True, international resources, principally through foreign direct investment (FDI), will be required to ensure the turn around of the economy. While government has been focusing on anchoring the economy on the mining sector, which is currently the single largest earner of foreign currency, it should not be lost that Zimbabwe has been traditionally an agro-based economy.

There is need for serious FDI inflows into the agricultural sector; our manufacturing sector, which President Mugabe admitted was facing "a myriad of challenges such as low capacity utilisation and obsolete machinery", requires the bulk of its raw materials from the agricultural sector. Currently, raw material supplies are being imported. The challenge now is for government to de-escalate its rhetoric on indigenisation, restore property rights and stop further invasion of farms and ensure policy consistency across the board. That is the masterstroke required to bailout our economy from its current quagmire.

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