By Dr Paul Mutuzu
Zimbabwe Finance Minister Tendai Biti’s recent budget contains important measures capable of wooing entrepreneurs,small businesses and the Diaspora for sustained economic recovery. With unemployment rate over 90%, Zimbabwe desperately needs triggers for driving the economy forward.
“What this budget simply means is that it’s time to ship my ‘gonyet’, my tractor, my F250 and the rest of the equipment lying idle in my garage for all this time. According to Mr Biti’s budget, I only have to worry about shipping costs.” said an excited Norman Phiri, who has been in the Diaspora for close to a decade. Mr Biti’s budget succinctly makes the case for Diaspora returnees to seriously consider investing in the homeland.
Measures contained in the budget such as abolishing import duties on capital investment equipment and technology-related products, for instance, computer hardware represent massive opportunities for entrepreneurs and small businesses who are responsible for creating new jobs. Numerous downstream industries will also be created in the process. The effects on the national economy will be felt immediately.
While some have selfishly argued that removing or reducing import duties on computers, cellular handsets, telephone sets and printers, will hurt local industries, such thinking wildly assumes that local industry was functional. When was the last time Zimbabwe produced computers or components for computer manufacturing? Mr Biti has simply created more opportunities for more people. The recently announced budget promotes the much needed entrepreneurship, one of the key engines for economic growth.
In the USA, small businesses form the backbone of the economy as they create most of the new employment (over 90% of all new jobs) and represent more than 50% of all private workforce. According to the US Small Business Administration, small businesses represent 99.7% of all firms. US small businesses constitute the world’s second largest economy, trailing only the US.
In that regard, the government of Zimbabwe has to do more to promote small businesses. With an ‘over-banked’ economy for its size, Zimbabwe must encourage the emergence of a bank specifically focusing on lending to small businesses and individual entrepreneurs. There is need for a fully-fledged agency that focuses specifically on entrepreneurship and small businesses.
Amid a backdrop of a mildly improving business environment (a direct product of lukewarm political progress), there is guarded optimism from many Zimbabweans in the Diaspora who are feeling the urge to play a meaningful role in redeveloping the homeland. While Mr Biti has set the right tone, one would expect that by now the government of Zimbabwe has already put in place a robust mechanism to mobilize Diaspora to leverage on its human and financial capital. Zimbabwe’s devastating brain drain has to be counteracted by a deliberate brain gain campaign.
Some of the practical steps to raise the much needed cash include issuing government securities with attractive yields specifically targeting Diaspora. There was a similar program in Sri Lanka where government managed to raise more than US500 million from its Diaspora by way of government securities.
Another route is the equivalent of India’s Persons of Indian Origin card (PIO) which offers preferential deals that attract Indians in the Diasporans back to India. Upon purchase of a $1000 card, members get preferential deals for instance, import duty exemptions for a long period, discounts, employment opportunities, as well as VIP treatment at Customs Boarder Posts. Finally the government has to swiftly communicate the admissibility of dual citizenships as these offer practical advantages to Diasporans who are still skeptical about Zimbabwe’s political stability.
Mr Biti’s budget is perhaps the most compassionate in history. He has budgeted US$32 million to take care of ‘vulnerable groups’ such as child-headed families.
In a country where its poor (seven million according to UN estimates) are largely surviving on donations for food from international aid agencies, allowing food imports duty-free is the humane thing to do. Isn’t it weird that the farm grabs has caused more misery and starvation since they were officially started back in 2000? All the same, Biti allocated US$146 million to help with inputs for small scale farmers. However the future of Zimbabwe’s agriculture lies in mechanization, not subsistence farming.
As expected the fiercest bashing of this noble budget had to come from our ‘knowledgeable friend’ – Jonathan Moyo, an ultra-partisan Zanu PF operative plotting in the shadows. Mr Moyo, who derives a lot of satisfaction from hectoring, undermining and condescending anything coming from MDC -T, did not miss the opportunity to do what he does best – gibbering! But these rants cannot go unchallenged.
In a thinly veiled endorsement of Mugabe’s recent calls for reviving the condemned Zimbabwe dollar, Mr Moyo echoed his ‘king’, regurgitating the same mindless talking points. Moyo said that the poor and the unemployed “have no chance of accessing any of the circulating multi-currencies”. For Zimbabwe’s economy to be where it is today, it is because of the likes of Mugabe and Moyo’s naivete, coupled with moronic printing of Zimbabwe dollar (by Gono) which consequently set world records of hyperinflation.
It was this sobering experience of hyperinflation which finally reconciled Zimbabwe’s politicians about the urgent need to address the economic cataclysm whose genesis was political paralysis hence the birth of an inclusive government. Unfortunately Mr Moyo is enemy number one of Zimbabwe’s inclusive government.
Every sane Zimbabwean knows that Zanu PF politics is monkey business. In 2005 Mugabe fired Moyo from his ministerial post of information having branded him“enemy number one.” Moyo was abruptly ordered to vacate the villa from where he spewed most of his stressful propaganda, forcibly fed to the nation. However Moyo pleaded with the High Court to delay the eviction, pitifully squirming, “I have no place to which I can relocate my family at such short notice.”
Moyo plotted the most dreadful and repressive laws in the country. He muzzled free press and freedom of expression. Some of his best known indelible footprints include his scary verbal attacks on the Daily News which culminated in a military-style attack of the paper. His leadership in architecting AIPA and POSA is ineradicable as it is still causing untold misery to media practitioners and journalists. This man should not be worthy of our attention given his dark recent past.
Does Mr Moyo’s recent lament that the budget opens “floodgates for hostile foreign information into Zimbabwe by eliminating all customs duty on newspapers?” surprise anybody? It is the shallowest of assumption for Mr Moyo to say that this is meant “to specifically advantage the foreign printing and publication of Prime Minister Morgan Tsvangirai’s newsletter,” as if it in not in the best interests of Zimbabweans who overwhelmingly voted him (MT) as their genuine leader. If Moyo had his way no foreign paper would ever circulate in Zimbabwe.
The people of Zimbabwe have long rejected propaganda from State-controlled media outlets like the Zimbabwe Broadcasting Corporation and the Herald. Removing import duty of 40% on foreign newspapers was quite daring. The mere thought of Zimbabwe finally having free press is disconcerting to those who have enjoyed monopoly of the press for so long.
But again what does he know about business? For the sake of moving the nation forward, let’s ask him to present an alternative budget or at least offer constructive ideas.
Reduction of excise duty on diesel will immensely benefit industry particularly the transport industry which heavily relies on diesel.
At this point the only criticism for Mr Biti’s budget is its apparent lack of imagination on measures of how to spur growth of the export sector. But overall Mr Biti’s economic growth trajectory of 3.7% is feasible.
Contrary to Mr Moyo, Mr Biti’s efforts are meant to reverse the impact of economic meltdown and to promote more economic activity that will see more currencies circulating. At the same time, Prime Minister Morgan Tsvangirai is fastidiously working to build a coalition of nations that will rally around the cause of Zimbabwe’s economic revival. Reconstruction money is on its way as long as political saboteurs like Mr Moyo are not allowed to prevail.
All that is required in Zimbabwe at the moment is the emergence of a steadfast political will. It is our sincere hope that men and women of Zanu PF will for the first time, desist from flirting with the politics of self-destruction.