Zimbabwe Crisis – Here are the solutions

By Tinashe Eric Muzamhindo

Zimbabwe has imploded into serious economic and political crisis due to a number of key fundamental factors. Here are some of the proposals as a development analyst that if adopted this country would move forward.

CUTTING EXPENDITURE

Majority of Zimbabweans are losing confidence in the current Government structure probably because of globe trekking when there is a serious cash crisis looming. Most ministers, parastatal bosses are withdrawing huge allowances at the expense of the nation.

To prove that really financial discipline is key to development the executive , ministers, MPs, senators must cut their expenditure and foreign trips that have consumed 60 million united states dollars.

Instead they are doing the opposite and spending the little that they have. Money cannot be grown on trees or underground, you have to be disciplined as a government. Government must urgently address the plight of the people by cutting their salaries and gazette them in a public press.

Every minister should take home at least $300 as net salary to show commitment. The current wave of violence is a serious sign of growing frustration amongst the citizens of this country. Most of these people they are enjoying huge packs when majority of citizens are suffering which is improper.

INFORMAL SECTOR

Zimbabwe s unemployment rate stands at 92.6% and this has reached unprecedented levels. Most of the people who are unemployed have resorted to vending and criminal activities and this is a threat to development.

Government must urgently address this by opening credit lines for small and medium enterprises and recapitalise the economy. The current impasse has reached catastrophic levels. The central business district has been contaminated with people who have nowhere to go and most of them have resorted to sell under garments, dirty staff, and people are confused and they have nowhere to go.

Majority of the citizens are surviving on a dollar per day and some even less instead of driving people out of the CBD they should instead creat the jobs. They need to address this urgently. One of the viable ways of addressing this issue is to support small and medium enterprises (SMEs).

Criminal activities have risen so high and its unbearable so what the current regime should do is to find ways of restoring investor s confidence back so that there will be continuous flow of FDI (FOREIGN DIRECT INVESTMENT).

The ministry of youth and empowerment introduced the youth fund for sustainability but truly speaking the 10 million fund is nowhere to be seen not even a single person benefited from this fund and these are some of the loopholes that need urgent address in this current set up.

CORRUPTION SHOULD BE A MATTER OF URGENCY

Most of the sectors have been hit by serious corruption issues and no one has been arrested. Net one saga no one was arrested, ZPC tender issues were the controversial business man Wicknel Chivayo is being accused of flouting tender procedures no one has been arrested. Public funds should be well protected. How does the Government of Zimbabwe guarantee the safety of public funds?

We can never attract investments so long, the way we conduct our business is highly questionable. NASSA issues not even a single person was arrested, and the same time there are so many people who were involved in corruptible activities they were never arrested. The looting of the 15 billion worthy of diamonds went missing and no one was arrested. Investors needs guarantee safety of our investments in our country.

FOREIGN DIRECT INVESTMENTS AND CASH CRISIS

Zimbabwe does not need to print money that is not the solution in the current mess up. What Zimbabwe needs is to turn around the economy. Zimbabwe needs FOREIGN DIRECT INVESTMENT right now and this is key to economic growth. We should creat a condusive and sustainable environment for investments.

Dangotte the African billionaire who has invested in more than 18 countries leaving out Zimbabwe is very suspicion meaning that the way we conduct our business is highly questionable. We need to sit down and see where we have gone wrong, find ways and look for economic measures that can be put in place to avoid implosion.

Zimbabwe needs 3 billion for now to put money into the main stream economy so that we can be able to grow the economy. What Zimbabweans need to understand and know is that money is not grown on trees but rather there is need to build the economy.

MANUFACTURING SECTOR

There is a mistake here and we should correct that. There is no need to print money but instead Government should be able to look for money to inject in the economy. Right now there is a lot of panic in the market and some of the political statements made by some of the so called analysts have caused unnecessary panic.

We need money for injection in the industry. Our challenge Zimbabwe is not manufacturing anything viable on the market, check the industry nothing, so how can we grow the economy. There are cheap and affordable products that we should be able to produce on our own as a country, we go as far as importing matches, candles, mineral water and we have gone down below the belt.

MINING SECTOR

Zimbabwe s mining sector is bleeding because of leakages and this is basically costing us as a country. We are the second largest platinum producer in the world and we are second poorest country in the world and what an embarrassment? We are so desperate as a nation that we have gone to the extent of mortgaging our country and minerals.

Most of these bogus investors have taken advantage of our current economic challenges to loot our minerals. Government must come up with a mining law that should be put in place to avoid leakages. We had diamonds that were worth 60 billion but it was unfortunate that within three years all diamonds are gone. The Government should put in place mechanism to avoid loopholes in the mining sector.

FOREIGN DEBT (EXTERNAL DEBT AND INTERNAL DEBT)

The problem with our country we cannot get any funding because of our image as a country. Zimbabwe has messed up big time.

Currently our external debt stands at 13 billion and no international lending is willing to give financial bailout, what we need to do is to clear our debts and change the way we conduct ourselves as far as business is concerned.

International and monetary fund (IMF) and the world bank need their money and there is no one who is willing to assist us. One of the fundamental principles of business is to return what you have borrowed. Who can trust us when our image is damaged. We need to put our house in order.

AGRICULTURE SECTOR

In the past agriculture used to contribute positively towards the GROSS DOMESTIC PRODUCT (GDP). If the current Government is organised we must be able to fund civil servants from the Agriculture sector alone. Our major challenge was that we conducted the land reform programme. Land reform programme was not done in a proper manner because we destroyed the agricultural system that was doing well.

Currently Zimbabwe is importing grain from the same farmers we chased away. There was no problem about the land reform, the idea was good but the way it was done. Politically it damaged our country. 75% of the land was supposed to be set aside for production purpose but unfortunately this was never done. Most of the arable land is lying idle.

Agriculture sector is the most viable sector if supported well it can bring economic development and enhance growth. What the current Government must do is to supply inputs on affordable rate to support local farmers to ensure food security. As of now our country is in danger because of food security.

We have shortage of grain yet before Zimbabwe was a bread basket nation with everything. Giving inputs and other incentives on partisan grounds should be a non-starter because even those investors willing to partner with the Government won’t be able to do so because of the way we conduct ourselves.

POLICY INCONSISTENCY

One of our major challenge as a nation is policy consistency. Ministers from the same Government issuing conflicting statements should be avoided at all costs because it is damaging the image of the country. Government ministers should desist from clashing in public for this will tarnish the image of the country that is already battered.

Zimbabwe must bring together the ZIM ASSET, JUICE, BUILD those documents should be brought together. These are well crafted documents with powerful technocrats but they are never followed. In fact Zimbabwe is one of the few countries known in the world of coming up with good sound documents with no implementation.

ENTREPRENUERSHIP SKILLS SHOULD BE PROMOTED

Most of the people are taking advantage of the current crisis to just join the usual song “ZVIRIKUNETSA”. People should desist from making such utterances and get down to business by coming up with good and sound entrepreneurship skills.

Entrepreneurship skills are good for the nation because this is another way of enhancing development through taxes. What the Government should do is to provide incentives for the entrepreneurs so that they will be able to operate in a conducive environment.

Some of the incentives are tax rebates to those who come up with positive developments such as social responsibilities, and they should offer them soft loans in a non-partisan way with low interest rates.

YOUTH EMPOWERMENT

60% of our society is mostly the youth and most of them if not 97% of them are unemployed. Government must come out clean on youth empowerment if there are housing schemes or other development programmes they must be non-partisan if we are to attract partners and investors.

Most of the youths have the potential to grow the economy. The position of YARD on youth empowerment is that youth policies must be broad based were everyone has a share or part on the national cake. Most of these tenders instead of giving them to the elite or to the political connect they must be given on professional basis.

Zimbabwe must invest their future in the youth for they are the leaders of tomorrow. 75% of graduates are now vendors and this has destroyed this country. What has gone wrong? We need to come up with a strategic programme to accommodate the youths.

TAX REFORMS

Zimbabwean Government is losing millions of dollars to the informal sector and the formal sector. Now that 95% of the society belong to the informal sector why can’t the Government introduce the informal tax and you will find that they will raise a lot of millions through that. Looking at China as a country check their tax measures they have managed to introduce many tax and this has helped.

What is the Government doing with the leakages in the informal and formal sector? Most of the companies particularly of those connected are not remitting taxes and this has costed the national treasury. I as a development analyst I propose that the Government must introduce INFORMAL tax with immediate effect to enhance development and promote economic growth.

TOUGH MEASURES BY THE TREASURY

Zimbabwe does not need a bloated Government. Go to Britain we have 15 ministers in the cabinet, and looking at Zimbabwe as a small country we just need 10 ministers and they will be deputised by permanent secretaries and principal directors. Some of these expenses are costing us as a nation and this should be implemented urgently.

We also need to deal with ghost workers particularly those called youth officers most of them they spend their time in streets or intimidating people. Government must introduce wage cuts. If you check very well 80% of the fiscus is going to the wages which is not sustainable as a economy.

At least we need to cut wage bill by 40% so that the remainder will go to the main stream economy. We have a bloated parliament, what do we need a senate for?

We don’t even need a senate and we have more than 200 MPs in parliament for what and this is draining the fiscus this should be dealt with as a matter of urgency. Government must buy vehicles from local car dealers to enhance development. This will help local dealers like Mazda Willowvale.

REBRANDING ZIMBABWE

The only way to bring development is to rebrand the country that has been damaged. How do we rebrand the country? There are several ways of doing this, and obviously the other issue is to implement political and economic reforms so that we bring investor confidence.

More than 400 laws have not been re-aligned and how do we operate in such an environment. This must be treated as a matter of urgency if we are to attract any meaningful investments. Politicians be it from the ruling party and opposition party they must all desist from making political statements that have a negative effect on the economy of Zimbabwe.

All parties must come together and make political statements that bring development. Corruption is one of the serious task we have as a nation because almost all the sectors be it private or public sector it has been seriously affected and no one is willing to do business in Zimbabwe because of that.

PRIVATISATION OF NATIONAL COMPANIES

Looking at Zambia as a nation you would find that from 1964 during Kenneth Kaunda s time it was difficult to do business. All state companies were chaired by Kaunda himself and this had negative impact towards the economy of Zimbabwe.

When Chiluba came into power he brought free market economy and liberalisation of the economy of Zambia were everyone would participate. This is what we must do. Look at air Zimbabwe, NRZ, MMCZ, ZMDC and all other state companies they are bleeding and draining the fiscus.

They are not performing probably because most of these company executives have staffed these companies with girl friends or in experienced people, those who are not qualified to be in those positions. My suggestion is that all state companies should be privatised with immediate effect or the Government must urgently look for REAL partners not bogus partners to bring development and this can boost the economy.

STATE PROCURREMENT BOARD

Investors look at the way we conduct our business. This issue of awarding tenders to criminals and controversial people should be stopped with immediate effect. Looking at ZESA deals and ZPC how does the Government guarantee public funds?

Currently there are major deals like GWANDA SOLAR PROJECT and the DEMA PROJECT all these deals were given to controversial people in society. All tenders must be done in a more transparent manner to avoid tarnishing our image as a country.

GOVERNMENT MUST SET UP AN ECONOMIC THINK TANK

In most of the countries be it in Europe or Africa there have set THINK TANKS that are responsible for giving advice to the government and market and even going to the extent of playing a major role of determining the prices of the market. We have a challenge when our local market is determined by politicians.

There must be a think tank comprising of technocrats, economists, academics, legal experts and these people must ensure that business is done in a more transparent manner. Think tanks are good for the country because their role is to give sound advice on economic matters. These bogus analysts who issue political-economic statements that are divisive and ill-advised should stop with immediate effect.

Business is business and politics is politics. We have so much potential as a country, a country full of natural resources, minerals, academics but we have gone below the belt were we have become a laughing stock of the whole world. You go outside the country to do business, the moment you introduce yourself as a Zimbabwean they begin to question a lot meaning, they have lost taste and we can never be trusted again.

CASH CRISIS

One of the major challenge we already have as a nation is cash crisis and I would like to outline it this way, its major cause is PANIC. People have no confidence in the system. You check the day when Dr Mangudya announced the issue of bond notes there was a serious panic in the market and most people could be seen withdrawing cash and making transfers.

What the Government must do through the RBZ since it has the mandate of handling monetary policy issues they must bring confidence on the market. Cash is there in people s homes but the problem is there is a lot of panic within the market.

Turning to the RBZ there is no need to print money at the moment but rather they must introduce plastic money were people avoid carrying large sums of money. This has worked in South Africa and Kenya and even in Europe and it has worked. They must put measures to ensure depositor s money is protected so that people begin to have confidence in the banking sector.

PROPERTY RIGHTS

Investors look at laws before they put their money in the mainstream economy. The recent threats by individuals to repossess land of people who do not belong to certain political parties is ill advised. Government officials must accept criticism from across political divide. Laws that govern the country must be clear on the issue of property rights to ensure safety of investor s properties.

DIALOGUE IS THE ONLY WAY TO GO

Political leadership from different political parties must be embraced for talks for the betterment of this country. We need dialogue especially from the major political parties so that at the end they bring development. The economy is sinking and the best way is to enter into negotiations to avoid implosion. People must bury their difference and work together.

Tinashe Eric Muzamhindo is the Director for Centre for Zimbabwe Development a local think tank that is responsible for policy formulation and community development.  He is a Development analyst. He holds a B.A, M.A SOLUSI UNIVERSITY and currently he is completing M.A Development Studies at University of Lusaka Zambia. He is also an entrepreneur and a motivational speaker. He can be contacted at [email protected]