We are a generation governing our country in such a reckless fashion so much that we don’t have second thoughts about the impact of our actions on the future generations.
Nobody is really talking about our public debt of over twenty-one billion dollars (US$21b). As Thomas Jefferson noted, public debt is a forehorse for taxation and “in its train wretchedness and oppression”
In Zimbabwe we shouldn’t take as much issue with this if the government was efficient and effective if it was to crave other people’s money to an extent of attempting to pinch every taxpayer’s money-unfortunately they are not. It’s a disaster.
Our government is one of the greatest examples of a moral hazard and putrid incompetence.
It continues in its circles of unbelievably ill thought innovations on exchange rates, currency, subsidies, crony capitalism, murky tenders, state enterprise support and of late a state secret society called Mutapa Investment Fund. Unusual acts of increasing debt.
Other people’s money is highly seductive, especially when you bear no consequences of your actions.
It becomes tragic for a country if the executive has comfort from either pliant members of parliament or clueless MPs or those who play to the gallery by focusing on the now instead of impact of government decisions to the future generation.
On the other side of the dichotomy it’s also disheartening when civic society becomes nothing but cashvists echoing external interests and narratives.
We continue in the path of debt creation and ruin as our strategic ideation is flawed and reckless;
The credo that “nyika inowakwa ne vene wayo” is a defective national strategy just like was “Zimbabwe is open for business”.
It is shocking that hundreds of economists, accountants, financial analysts and lawyers employed by Ministry of Finance, Reserve Bank of Zimbabwe, Office of the President and several ministries don’t inform leadership that using cash to finance long term projects is not financially prudent idea and that it has never worked anywhere even in advanced economies.
The financial pain of these decisions to the future generation will confirm us very irresponsible administrators of our country.
Our central bank has been a disaster since Gonomics time. It is still innovating around the familiar.
To imagine that at some point RBZ conducted a mischievous, delinquent and tragic test on our national comprehension through increasing country debt using a very brain haired idea of debt assumption yet it was well known that its quasi fiscal activities benefitted a few well known and networked individuals who they could pursue. The current governor is leading us into that path as of now so we are robbed again in the not so distant future.
The recent past and present governor of the central bank have been subsidizing business and, in the process, minting millionaires who really have to trade currency without the need to work. It’s an unusual way of thinking.
RBZ pours hundreds of millions of scarce foreign currencies to ensure entities and the networked procure foreign currency at fourteen ZiG when the real rate is thirty-one ZiG.
That’s a self-defeating act as the arbitrage opportunities are many and most importantly it has to be funded by debt and tax payers’ funds. This level of irresponsibility is a scorched earth policy that will surely harm the future generation.
The incompetence of not being able to manage a currency, something the poorest and even countries at war are able to do is our curse to our children and grandchildren.
The networked are enjoying life, leisure, travel, holidays, cars and great “foods “because of arbitrage opportunities. The poor aren’t part of this mess but bear the brunt of failure to just have our own money.
Now enters Mutapa Fund the largest public entity with no procurement, disposals and audit oversight. It can even dispose state assets for a pittance. It can create debt, have them underwritten by government and get government letters of comfort.
After the insult and assault of debt assumptions it is possible we have a second coming from Mutapa Fund to ask future citizens to assume debts of state-owned enterprises.
Almost all state enterprises are in debt. There is no plan to ameliorate the debts.
Just to understand our quandary as a nation is threefold. First, these companies and corporations are operating at a loss and are not growing revenue. Second, they have no viable debt retirement strategy.
Third, they continue to accumulate debt with ZESA paying a whooping US$36 million of the US$50 million revenue to the Chinese company that constructed the hiccup saddled unit 7 and 8 at Hwange. It’s possible the future generation won’t own that power station.
Then we have a challenge of tenderpreneurship that is not only murky but a blatant and obscene looting of resources.
What triple profits, non-supply, and sub-standard goods do is re-allocation of resources from government revenue generating projects creating a deficit requiring more borrowings.
Zimbabwe has some issues with cost priorities but it has more challenges on the revenue side. Budgets should ideally support revenue growth, value addition, production and employment creation and exports. That’s what is the most viable strategy to reduce public debt.
Let’s have our currency, have transparent state enterprises, nip corruption in the bud, do away with this Mutapa Investment Fund, have transparent tenders, stop unnecessary subsidies and govern our country with love and devotion.
Brian Sedze is a strategy, innovation and compliance consultant. He is also the Executive Director of Free Enterprise Initiative
Good article, a pity the powers that be will not pay attention to this clear analysis.
They don't care about the people all what they want is to amass wealth and power