ZIMBABWE is in its third month since the launch of the National Economic Development Priority Programme.
At its launch in April, government promised momentous changes in our economic fortunes by mobilising critically-needed fore
ign currency resources of US$2,5 billion and employment creation. This was supposed to coincide with Reserve Bank governor Gideon Gono’s projected decline in inflation in the second quarter of the year, which is to say, to resolve the dislocation between fiscal and monetary policies.
Zimbabweans, having seen similar policies in the past experiencing a stillbirth, were sceptical about the magical efficacy of the new policy. Since then we have had to be even more sceptical.
The zeal with which the marginal fall in inflation in June was seized upon as a sign that the elusive economic turnaround was nigh suggests that there is something fundamentally wrong.
A possible explanation for the slowdown in the rate of inflation could be relative availability of maize, meaning that fewer people are buying mealie-meal, or simply that they are going hungry because they can’t afford it.
There has been no change in fundamentals or the pricing distortions in the economy caused by a multiplicity of prices for fuel and foreign currency for manufacturers. If anything, intermittent and unscheduled power disruptions by Zesa Holdings have caused further collapses or reduced production.
Reports from the recent ZNCC congress indicate that government borrowing for recurrent expenditure has virtually crippled the productive sector. There is little that can be done for heavily borrowed companies in the light of suffocating interest rates.
Despite numerous trips by Gono and Vice-President Joice Mujuru to the Far East and Russia, there haven’t been any significant deals to slow down the economic slide. Apart from a few buses and tractors from China, the response has not been encouraging. That we can posture about choosing who we want to do deals with only exposes our political and economic naivety, for there is nothing like aid without strings.
The best that Gono and his political masters can achieve is to flood our markets with substandard products and at worst to mortgage the country’s natural resources in the name of so-called “leveraging”.
China can only sign deals that are in its own interests, for there can be no objective complementarity between an economy in such steep decline as ours and a booming one such as China’s.
Despite loud claims that government was working closely with the private sector on the NEDPP, there is no evidence of that harmony in practice. Witness the lack of progress in TNF discussions where the parties can’t agree on “reasonable” wage levels for workers, “reasonable” pricing mechanisms for producers and the desirability or otherwise of price controls by government.
In the past government has accused private sector players of being reluctant to buy into its programmes because they are influenced by opposition politics and therefore trying to sabotage its policies. If this were so, there would be more saboteurs in Zanu PF itself than outside.
At a meeting last week with party provincial chairmen, Mujuru was at pains to stress what should have been obvious: that party decisions informed government policy, including NEDPP.
She was therefore shocked when the chairman for Matabeleland South Rido Mpofu, informed her that until that meeting, they also did not know what the NEDPP stood for and what was expected of them. How are outsiders expected to know what party insiders don’t?
There have been so many policy changes and inconsistencies that even Zanu PF structures appear confused. They say policy inconsistency is worse than no policy at all.
The general view of industry and commerce is that an immediate economic turnaround is almost inconceivable in the absence of a marked rise in production on the farms which constitute the major source of raw materials for industry. This should in turn increase capacity utilisation to create jobs and raise exports. But that is not a view shared by President Mugabe who recently said if those allocated land chose to dance on the land, “it is ours. Why should that worry anybody?”
The chaos on the farms, the looting of crops and equipment, wrangles over boundaries and farm ownership and lack of urgency in issuing lease agreements are all emblematic of this philosophy in the echelons of government. And the NEDPP is bound to become another victim of the same.