Few weeks ago, I asked in this instalment if the approach of this current government is to start a new economic base or to rebuild or patch the current tattered one. In raising this question, the objective was to contribute towards positioning the debate within the right framework. That definition would be a kind of a mental cartography, which helps to transform their ideas into action allowing the ordinary citizens to understand and navigate through our current economic landscape.
GUEST COLUMN TAPIWA GOMO
Establishing a new economic base would have provided an opportunity to bring together and introduce new investment constituencies and decomposing the ‘queen bees’, who have been fleecing and bleeding the country of its resources.
It also allows a chance to introduce new forms of discipline which can breathe confidence in the economy.
This is necessary, because the country’s inability to revive its economy is largely because of mismanagement, corruption and plunder and not lack of resources.
As long as the retreat from the past and present bad behaviour is incomplete, there are limited possibilities of revival.
Patching the tattered economy simply means keeping the same old, greedy and corrupt hands in the system and allowing them to manipulate the system to protect their interests.
The fuel situation is the case in point.
A few months ago, we heard about how an alleged fuel cartel had captured the central bank.
The same people have remained major players and the fuel supply system is still clogged up.
Instead of President Emmerson Mnangagwa reducing himself to announcing new fuel prices as if he has no Minister of Energy, the government should have facilitated the establishment or re-arrangement of groups of fuel suppliers and ensure a competitive environment.
Up to today, the nation is still struggling to figure out what direction the government is taking to fix the economy.
Finance minister Mtuli Ncube’s approach so far seems to suggest that he is working hard to appease an external audience by adopting some of the tenets of economic structural adjustment programmes such as balance of payments deficits reduction, budget deficit reduction through higher taxes and lower government spending, also known as austerity, restructuring foreign debts, eliminating subsidies and freezing or cutting civil service wage bills.
There has also been investment of time and effort to look good to the same international audience.
For him, the opening up of credit lines from those external audiences is the way forward towards kick-starting the economy.
This explains the obsession with Davos World Economic Forum and those foreign trips.
In a laboratory and academic space, this works.
But in the ideal world, if it proceeds oblivious of other factors such as domestic investors, it risks failure.
For starters, external investors are not lured by the promise of a clean economic system alone.
They need assurance of three things; the safety of their investments, guarantee of profits and fair and competitive environment.
These assurances should not only be given in utterances, but demonstrated by action.
The country missed an opportunity to demonstrate its seriousness in dealing with corruption when those cases that dominated headlines were acquitted.
So far, all high profile corruption cases have been acquitted, including those where funds were transferred for projects but delivery has not been satisfactory.
Their acquittal was polysemic, but to an external investor, it simply meant one thing: their money was at risk with limited chances for recourse.
In addition, the first source of confidence is the domestic constituency of investors, which the government has not given much attention.
It seems they are stuck on the belief that only external capital will save the country.
Again this, explains the resurgence of the ZIDERA sanctions debate.
I concur with those who have argued that sanctions are not a major impediment to reviving the economy.
The Ministry of Small and Medium Enterprises has not been as vocal in mobilising the local investment energy to be part of the economic revival agenda.
The country is yet to hear their strategy or plan of action.
This ministry is missing a “Jonathan Moyo” touch, which gave us the media content policy and Stem campaigns in the two ministries he presided over.
The ministry should have been at the forefront, pushing for resources and opportunities for small and medium businesses to thrive.
By now, we should have seen those big conferences discussing ways of taking off and exchange of ideas with major economies.
That is how it is done the world over.
Major global economies were not started by big businesses, but by families and small scale players.
Once the domestic sector is vibrant, rest assured that big companies and big money will follow.
It is rarely the other way round.
Most foreign investors tend to do their assessment of the economic situation through local investors than through the government.
There is a good reason for this, especially given our historical terrain which is sedimented by decades of corruption, plunder and targeting of foreign owned entities.
Foreign investors see their capital as less safe in Zimbabwe than domestic in the event of angry politics.
This could be one of the reasons those mega deals have not materialised.
But it is also sad that, we consider foreign investment as a solution to our problems as if they are established to fix countries’ problems.