By all accounts, Finance and Economic Development minister Mthuli Ncube is a brilliant man, a financial engineer with a wealth of experience in both the private and public sectors. His appointment to head Zimbabwe’s Treasury seemed God-sent, and ideal to steer President Emmerson Mnangagwa’s Second Republic drive towards economic salvation.
BY MTHANDAZO NYONI
Ncube was fished from Europe, where he was running a consultancy firm and hoisted as a technocrat with solutions to fix the burning economy. And yet Zimbabwe’s economy has continued to its path to ruin, because of the policies that Ncube introduced.
“We want to move away from doing things ad hoc, and do things in an orderly planned way, to provide certainty,” Ncube told our sister paper NewsDay recently.
“But what is happening is chaos, the exact opposite of what we are trying to do!”
Analysts who spoke to Standardbusiness last week pointed out that Ncube is probably the right appointment at this point in time given the country’s dire need for new friends with money.
But he needs to understand how to navigate Zimbabwe’s treacherous political minefield to survive, they warned.
Since coming on board as a Cabinet minister, he has been tripping on political landmines, with the latest being the appointment of chairperson of a communication taskforce, William Gerald Mutumanje, also known as Acie Lumumba.
Financial expert and economist, Persistence Gwanyanya said Ncube needed to be very close to President Emmerson Mnangagwa as well as the Zanu PF politburo for him to be able to cut government expenditure.
“Yeah, that’s very true. You see what is happening in the country at the moment; the biggest challenge which Mthuli is trying to address by the Transitional Stabilisation Programme is that of disproportionately high government expenditure which can be traced to government indiscipline which has manifested itself in treasury bills, the increase in overdraft on the Reserve Bank of Zimbabwe,” Gwanyanya said.
“So clearly, in a dollarised situation we don’t expect the government to take more than it generates. It has to be limited, but it has been finding other ways of spending significantly more than it generates. So clearly, we need a minister who is in a position to quell this trend, to quell this government expenditure. So if it’s just a general person it may prove to be difficult for one to achieve that,” he said.
Gwanyanya said the domestic debt was now about $9,5 billion, significantly up from $200 million plus in 2012.
He said that spoke to government indiscipline. Money supply, on the other hand, has significantly increased to about $9,14 billion and the bulk of it was as a result of credit creation at government level.
“So all these speak to the need to address government expenditure, but you can’t just talk about addressing government expenditure, you need the leadership to buy from what you are saying. So you need to be very close to leadership. You need to be influencing the second decision somewhere because decisions of government are made at politburo level first before they even go to cabinet,” he said.
“So the politburo and President are very important in the decisions of the government. We are not saying he would be ineffective. The extent of his effectiveness is dependent on his ability to influence the President and the politburo. But one is in a better position to do so when he is also in the politburo and a member of Zanu PF.”
Economic commentator Reginald Shoko said Zimbabwe was failing to strike a balance between politics and economics for too long, but Mnangagwa had promised to concentrate more on economics which would be very important to turn around the economy.
“He (Ncube) must focus on economicfriendly policies and minimise populist policies which has been the biggest weakness of the previous ministers. He must bring in a culture of timelines, not just good policy pronouncements without implementation matrix,” he said.
Another economic commentator, John Robertson, said years ago, government lost the trust of the people and Ncube needed to win it back.
“The trust was lost because government helped itself to other people’s property. Import permits, foreign currency allocations, property, mining claims, bank deposits, company shares have all been confiscated and shared out among government supporters,” he said.
Robertson said government had to give back what it took and would have to promise never to confiscate anything from anybody, ever again.
That promise, he said, had to be reinforced by changing the section in the Constitution that declares farmland to be the property of the State.
“If government were to put the land back onto the market and change the Constitution, the damaged confidence would be repaired and the economy would begin to recover. Human psychology dictates that people behave best when they feel safe,” he said.
“In Zimbabwe, nobody feels safe when the state can authorise itself to take people’s property. This country will recover fast if government promises to respect property rights and revives the rule of law.”