By Kudzai Chawafambira
HARARE – Finance minister Patrick Chinamasa has told industry to be innovative in dealing with economic challenges facing the country, rather than wait for government to tackle them alone.
He said when a revolution happens within the economic field organisations need to come up with creative solutions and it was “high time institutions coped with changes and adapt to them in a dynamic way”.
The Treasury chief’s call comes as industry has said his recently announced 2014 National Budget is devoid of solutions to address the country’s economic woes.
Zimbabwe’s industry and business is finding the going very tough — particularly following the July 31 elections — under economic challenges including an acute liquidity crisis, limited credit lines, low savings, depressed investment, a huge external debt overhang, subdued productivity and general financial sector vulnerabilities, among other constraints.
“The failure by our institutions both public and private to recognise very fundamental massive social and economic revolution that is taking place is an indictment to all of us,” Chinamasa told delegates at a 2014 economic outlook symposium on Wednesday.
“Some of the realities that come to the fore are that workers go for months without being paid but they still come to work every day using their own resources… the question I always ask is how are they surviving?,” he asked, adding that “I also want some answers to that … if we can get the answers we are somewhere along the line towards a solution.”
“This is what I have been saying to the Bankers Association of Zimbabwe (Baz).
“Your market is no longer here, your market is these people who are plying their trades seeking to emerge in the new economy, in the informal sector but you are ignoring them completely.
“No efforts are being made to see how you can service or use them to bank or lend to them,” Chinamasa said. He, however, noted that “we cannot have a situation where the majority of our population is out of the official market economy and access to (formal) capital, we need to work on that.
“Let’s not use paradigms of other countries, we are unique. Let us have case histories that come from our own socio-economic environment.
“When you tell me a reality, I can recognise this is a Zimbabwean experience. It is important to have realities that we can relate to. We need to have the facts and once we have that we now have our true bearings to work our way out of present predicament, that is where solutions will come,” said Chinamasa.
Speaking at the same occasion, leading independent economist John Robertson highlighted that Zimbabwe needs to respect ownership rights as a fundamental aspect in reviving the economy.
“I accept that my fellow speakers will be putting the focus on other aspects of the creative and innovative flair that needs to be encouraged. I just want to emphasise that no matter how good they are and how well they are described, all the ideas will fall flat in Zimbabwe if we continue to show disrespect for property rights,” he said.
World Bank economist Nadia Piffaretti also said Zimbabwe needs to overcome key legacies which were heavily tilted towards short term rent appropriation and anti-investment bias by shifting towards the long term strategy.
“It is time to build with a more long term perspective. You need to start working, thinking and make your budget break even in the long term. Zimbabwe has a lot of options for progress and one of them is getting the basics right,” she said.
Piffaretti noted that there should be no room for complacency because the challenges bedevilling the country were quite immense.
“You need to get the message to government to stop looking up to firms and the message for firms to stop looking up to government.
“The country needs to strengthen stability of overall macro-financial conditions and promote domestic confidence,” she said.
She noted that the country needed to dispel the notion that foreign direct investment (FDI) was “a cloud in the sky where it will be like rain which sometimes comes down or does not come at all”.
“It’s actually very different. Most FDI is brought in by domestic businessmen who start an idea wanting to develop projects and wanting investment.
“Legislation should therefore take into account that FDI is usually initiated by a domestic entrepreneur in search of new technology or markets,” said Piffaretti. Daily News