Finance Minister should take the lead

Minister Chinamasa

Minister Chinamasa

Martin Tarusenga
The Herald Business edition of April 30 2015 reported the Vice President Emmerson Mnangagwa announcing to the International Business Council that Government will by August 2015 produce a National Competitiveness Assessment Report.

The report, being coordinated by the National Economic Consultative Forum will “. . . provide strategies to clean up the country’s image as a high cost production centre.”

The Vice President conceded that Zimbabwe is a high cost production centre with labour costs being some of the highest production costs.

Media reports confirm company executives in Zimbabwe being some of the highest paid in the world, despite the manifestly faltering industries, and despite evidence of lack of innovation, and low to zero productivity.

General discussions in the wake of the Salary-gate scandals illustrated poignantly how incompetent CEOs sabotage this economy demanding huge pay packs, while their businesses are going down.

As a measure of the extent of this aspect of lack of competitiveness, some the CEOs have so been running down such institutions since the days when Zimbabwe achieved its independence — when there was that inexperienced belief that the economy could remain buoyant with anyone in any position. Some of these CEOs have reinforced this lack of competitiveness in the incumbent economic sectors by essentially carving out “jobs for life” — hence largely the same names can often be observed to have been at the helm of non-performing economic sectors and industries for very long periods.

While it is procedurally correct to enlist the NECF to roll out the said clean up strategies, it does not appear to be pragmatic to go this route, considering the commonplace evidence of lack of competitiveness in Zimbabwe, as outlined above.

The article “Competitiveness key to return of Zim dollar” published by this paper in late 2012, discussed the imperativeness of having a national currency sooner, as a matter of national pride and as a way of inculcating good work ethics and competitiveness in Zimbabwe.

By way of example it outlined an instance of lack of competitiveness in the pension and insurance industries, the banking sector and financial services sector overall, in Zimbabwe — as headed by the Finance Ministry.

As an apparent follow-up on this 2012 article on lack of competitiveness in Zimbabwe, this same paper has published a series of articles providing hard evidence of lack of competitiveness at various levels in the pension and insurance industries — not least at pension/insurance fund boards of trustees level, at insurance company levels, at the level of the regulating body IPEC and at the level of the Finance Ministry.

The articles expose how this dearth in competitiveness is shielded by corruption and governance without accountability; and how in turn the unaccountability and corruption is engendered by patronage, blind loyalty, cronyism, kinship and wanton greed.

In the knowledge and experience of the author, a scan of personnel in the pension and insurance industries would reveal senior employees/CEOs whose usefulness is way past their “sell-by” date, staying on as a consequence of the said kinship, blind loyalty, etc.

Against the background of that lack of competitiveness of economic sectors in Zimbabwe in general, and of the pension/insurance sectors in particular, as given above, it is apparent that CEOs in Zimbabwe (so called industry captains), are not known for their innovation and performance in the job, as would be the case in developed economies.

Company share prices often actually shoot up, or fall (as the case may be) when some CEOs in the latter developed economies are known to take over, or to depart from, given companies.

In contrast, CEOs in Zimbabwe are known just for being there for long periods, and/or for being anointed onto the company position by some “powerful” or cult personality via the patronage, cronyism, etc!

In the latter circumstances, scandals or at the very least, laissez faire in corporations, is the order of the day.

As would be expected the public has been complaining about the continued general downturn in the economy, and of course pressuring it to identify the problems, with the view to doing something about the identified problems.

Government set up of the Anti Corruption Commission of Zimbabwe in 2011 was a response to this public pressure.

The ACCZ was set up with the primary objective “to combat corruption, theft, misappropriation, abuse of power and other improprieties in the conduct of affairs in both public and private sectors.”

But four years down line, the ACCZ has been condemned by the general public as ineffective, with itself being mired up in apparent corruption, according to some media reports.

So scandals and laissez faire continue — that is the goal for national competitiveness is again subverted by cronyism, kleptocracy, kinship, blind loyalty, among other such vicissitudes.

The pension and insurance industries for instance, continue to refuse pensioners and insurance policyholders their rightful benefits after investigations reveal that several things were done ith IPEC, understated the value of the industries by at least $12 billion, and their benefit calculations were wrong; The Finance Minister will not get round to setting up the pension/insurance Commission of Inquiry a year after Government saw the need for such an inquiry to help pensioners and pension funds secure their rightful dues — can the Finance Minister stand up to Zimbabweans and say that a turnaround period of a year to set up a commission of inquiry is “competitiveness”?

So now, there is in this discussion, at least three Government organs whose economic competitiveness is already in question, namely the Anti Corruption Commission, IPEC and the Finance Minister.

That is one Government organ too many to be found wanting in national competitiveness, considering that governments set the tone for national competitiveness.

The conclusion can reasonably be made that Zimbabwe’s dearth in economic competitiveness is a consequence of lack of competitiveness at the level of senior Government personnel.

The latter senior Government personnel are not competitive enough to roll out and implement effective economic policies that engender competitiveness nationwide, instead concentrating on policies that engender corruption.

An official of the National Economic Consultative Forum is on record saying that there are no surprises to the manifested lack of national competitiveness, but surprises in Government inability and/or unwillingness to set policies that engender national competitiveness.

Honourable Finance Minister, please set the pension Commission of Inquiry, bring IPEC to account and dissolve it; and set pension/insurance industries growth targets for a new “IPEC” — that will introduce competitiveness in the two industries.

 Martin Tarusenga is General Manager of Zimbabwe Pensions & Insurance Rights, email,; telephone; +263 (0)4 797020; Mobile; +263 (0)772 889 716. Opinions expressed herein are those of the author and do not represent those of the organisations that the author represent