HomeOpinion & AnalysisTen Point Agenda for Inclusive Government

Ten Point Agenda for Inclusive Government

FEBRUARY 11 2009 enters the annals of Zimbabwean history as a historic day in many respects. Apart from marking the final consummation of the Global Political Agreement and the swearing in of the prime minister and deputy prime ministers, the day marked the break from a violent past to a future of hope for all Zimbabweans.

Zimbabweans across the political divide now expect delivery.

Yet, there are no quick fixes to the economic challenges that the inclusive government has to confront.

There is no time for rhetoric or sloganeering.

Cabinet ministers and all government officials, including civil servants, must leave their party caps at the doors and hit the ground running.

To use Lenin’s rhetorical question, “I ask: What is to be done?”

In the first 100 days, urgent priority should be given to the building of trust and confidence.

The inclusive government must have unity of purpose and roll out an irreversible governance and democratisation agenda whose main tenets include the restoration of the rule of law and human rights in all its dimensions and the redress of all democratic deficits.

Linked to this, all repressive pieces of legislation such as Posa, Aippa, the Broadcasting Services Act, Criminal Law (Codification and Reform) Act, to mention just a few,  must be overhauled so that they are in sync with a democratic dispensation.

The democratisation agenda is fundamental. It will give signals to the international community about the functionality of the inclusive government and help unlock the much-needed resources for the economic stabilisation programme.

Second, we need to kick-start the making of a new people-driven constitution without any prevarication. Zimbabwe is in need of a home grown constitution.

It is an ideal which has been elusive in the past because of process issues. We hope the inclusive government will do it properly and in a manner which resonates with the wishes of all stakeholders, including civil society.

Third, the humanitarian crisis is an urgent matter. My own conservative estimate is that we need at least US$100 million every month to pay teachers’ salaries, buy books and equip the schools. Primary education must be universal and totally free.

In the next two months the health sector requires US$300 million to revamp and recapitalise all health institutions which are in an advanced state of dilapidation.

Zimbabwe needs at least US$500 million to import wheat, maize, animal feeds and other cereals in the next six months.

Herein lies the issue of resource scarcity and opportunity cost.

Zimbabwe’s  foreign and domestic debts are hovering around US$8 billion, thanks to inflation which knocked down the domestic debt substantially.

The question is —— can we afford to retire our debts when Zimbabweans are starving and dying from cholera? 

The answer is that we need a debt forgiveness conference which involves the Fishmongers Group and multilateral bodies in order to discuss debt rescheduling, debt forgiveness, debt equity swaps and above all debt restructuring.

This does not mean we are repudiating our obligations. Far from it; we are merely bargaining for more time while we commit resources to more urgent and pressing humanitarian issues.

Fourth, economic stabilisation is one of the first priorities of the inclusive government. 

The goal of economic stabilisation is to stop the economic bleeding and thereafter pursue the objective of price stability and stimulate growth.

But price stability assumes there is a domestic currency which needs to be debased.

The reality is that dollarisation or multiple currencies, are here to stay for as long as we have not addressed the supply side of our economy.

Local industry has to be resuscitated by increasing capacity utilisation from the present level of 25-35% to 65% and above.

Our export levels are down —— a mere US$1,4 billion to date compared to US$2,8 billion in 1999.

The Ministers of Finance and Industry are seized with this matter.

They need to work out a battery of incentives and measures to stimulate domestic output and increase exports.
In the meantime, the Reserve Bank should go back to its core business of exchange rate management, revaluing the local currency, building foreign reserves, open market operations, debt management and financial sector supervision.

I am pleased that central bank Governor Gideon Gono alluded to his intention to halt all quasi-fiscal operations in his recent monetary policy statement.

These quasi-fiscal operations had become inevitable due to the dwindling state revenues in the face of economic meltdown on the back of hyperinflation, the drying up of foreign direct investment and overseas development assistance and non-availability of balance of payments support.

Government ended up resorting to the RBZ for funding of virtually all government business. Indeed ministers rivalled each other with funding requests to the governor.

We can only hope this is gone and we open a new chapter which will see the RBZ becoming not necessarily independent but at least autonomous.

Otherwise the major challenge for the RBZ is how to gradually restore the domestic currency to convertible status over the medium to long term.

In the meantime, as a matter of principle, all workers in the private and public sectors must be paid in foreign currency.

On the other hand, fiscal policy will have to deal with the albatross of loss-making parastatals which have been bottomless pits in so far as financing is concerned.

A fiscal policy stance which will lean towards capital expenditure and less recurrent expenditure will be laudable. Above all, a fiscal policy stance which will emphasise non-inflationary sources of deficit financing is likely to yield positive results.

Conventional practice would have us believe that a deficit threshold of 5% is desirable for macroeconomic stability but it all depends on the ingredients of the deficit.

There has to be some pragmatism and flexibility.

The Minister of Finance will have to  familiarise himself with the Ricardian Equivalence Hypothesis and the Keynesian postulations on the deficit and its connection with macroeconomic stability.

I don’t doubt that out competent new Minister of Finance will rise to the occasion and surpass the bar of our expectations and in this regard I wish him good luck!

Fifth, levels of domestic and foreign investment are critically low. But we cannot talk of mobilising domestic savings when the financial sector is highly disintermediated. Financial sector reform must be a top priority for this inclusive government.

Pari pasu, we need an investment conference to drum up support for new international investment.

Sixth, we need to work on our mineral resources and make sure we add value in our mining sector. All illegal mining activities must be brought above the radar.

All systemic leakages must be plugged so that Zimbabweans enjoy their wealth.

The platinum sector is a minefield of controversies and there has to be a thorough audit and due diligence analysis of all investments, permits and explorations done since 2000.

The same should be done in the parks and wildlife sector, especially the state of hunting concessions.

Seventh, infrastructural rehabilitation is critical for sustainable development and livelihoods. We need to embark on a massive rehabilitation of major rural and urban road networks which have been neglected over a long period.

In the area of road engineering and infrastructural development in Africa, the Japanese are miles ahead.

They managed to revamp Zambia’s road network to first world status after many years of neglect during Kaunda’s rule.

Eighth, urban water planning and sewer management are a sine qua non for the attainment of MDGs. We need to overhaul urban water supply systems and do a lot of capital investment in water harvesting and reticulation.

In this regard, local authorities would have to be financially and technically strengthened now that Zinwa has surrendered the responsibility back to councils.

Ninth, corruption must be tackled head-on without fear or favour.

Value for money audits should be done in all ministries and the Public Accounts and Budget committees should be strengthened in their oversight functions.  

Tenth, the inclusive government must respect the sanctity of private sector enterprise. Markets must be facilitated to work smoothly not to be frustrated by sometimes self-serving state intervention, especially in regard to pricing. We must put a stop to all covert and overt predatory policies.

Finally, we must not abandon agriculture.

There is need for massive budgetary support in the area of agricultural inputs, farm mechanisation, import parity pricing and technical expertise.

Zimbabwe must regain her breadbasket status in the 2009/2010 agricultural season. A land audit must be carried out to determine the question of utilisation and multiple ownership as we roll out the new agrarian reforms.

The task ahead is huge.

Dr Mashakada is the MDC-T Deputy Secretary General.

BY TAPIWA MASHAKADA

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