Investors Should Keep Their Money Until We Have Fiscal, Monetary Stability: Eddie Cross

Eddie Cross

Eddie Cross the MDC member of parliament for Bulawayo South has dismissed the popular mantra “Zimbabwe is open business” saying that not much has changed with President Emmerson Mnangagwa’s government. Writing on his personal website, Cross says:

Zimbabwe cannot be ‘open for business’ unless we get our run awaybudget deficit under control and back to more acceptable levels – say 5 per cent of GDP. That will require reducing the Civil Service by trimming all irregular posts (about 150 000 people), eliminating all ghost workers and making sure everyone who is paid actually has a job and work to do. Unless this happens, inflation will continue to rear its ugly head and destroy value. Investors would be well advised to keep their money out of the country until we have fiscal and monetary stability. Right now, that is not the case.

Zimbabwe cannot be ‘open for business’ until we abandon the policies of the past which have created a Reserve Bank monster that steals money in broad daylight and destroys value with exchange controls and corrupt practices. We need to give the Reserve Bank total freedom from the Government, appoint a Board of Directors and management that knows what they are doing and will play the game according to sound, internationally accepted rules and principles. We must abandon all forms of exchange control, allow the private banks to manage their client’s money in their best interests and leave the assumptions of value to the market.

Zimbabwe cannot be ‘open for business’ unless we resolve the liquidity crisis by curbing the State’s appetite for consumption on credit and introduce our own currency managed by a Currency Board or some similar institution which will strictly control the printing press and the computer key boards of the Central Bank. Those who are horrified at the very thought of a new currency must simply ask themselves, if Botswana, South Africa, Mozambique and Zambia can do it, why can it not be done here? Of course, it can – IF you follow the rules.

…We are not ‘open for business’ when the President and the Minister of Mines sign a deal they flag as being a ‘US$4,2 billion investment in platinum’ when the land being associated with the deal is already part of a mining right in the balance sheet of another major investor who is already here and has already spent billions. Signing deals with shady people, with a poor record in other countries and are known as people who seek to simply exploit rather than invest, is a dumb thing to do anywhere – but especially here when we are so vulnerable to the Lear Jet brigade.

Only and until we have dealt with all these issues will we really be ‘open for business’, until then we should concentrate on cleaning up our act and getting our house in order – then we will all be surprised as to how quickly investors discover what we are – a pearl of great price in Africa.

More: Read Full Article