2015 economy review: Job cuts, pay farce

2015 economy review: Job cuts, pay farce

via 2015 economy review: Job cuts, pay farce – NewZimbabwe 28/12/2015

THE July-September job cuts which affected at least 20,000, a looming drought and the current gridlock in civil servants pay by government sum up a dreary 2015 year best remembered for its economic turmoil than better.

“This is a recipe for political instability as disgruntled workers will turn against the government for failure to protect them,” the Zimbabwe Congress of Trade Unions warned of the job cuts August this year.

“The Arab spring is such an example in which there was social unrest…”

The year began with the controversial introduction of US dollar pegged bond coins denominated from 1c to 50 c, ostensibly to augment the current multi-currency regime.

Authorities felt this would correct the pricing of goods and services in a country where charges were being rounded off to the next dollar due to the lack of change.

Central bank governor John Mangudya has since revealed there was $10 million worth of bond coins currently circulating in the economy.

The xenophobic attacks that rocked Durban and Johannesburg April, coupled with routine deportations of Zimbabwean economic exiles in South Africa also spotlighted on the country’s economic decay.

Seven were killed while thousands were displaced by violence torched by Zulu King Goodwill Zwelithini’s anti-migrant comments.

But South African President Jacob Zuma, pressured by neighbours to make his country more habitable for foreigners, threw the proverbial cat among the pigeons when he asked his accusers to fathom out their culpability in the mess.

Zimbabweans form the bulk of migrants in South Africa.

Those who survived physical attacks would later during the year not survive the fall of the rand against the US dollar as was evidenced by the failure to visit home this December holiday.

RBZ debt controversy

June also saw the central bank move to demonitise the now defunct Zim-dollar in an unpopular effort to offset bank balances decimated by hyper-inflation in 2008.

Account holders who had balances of up to Z$175 quadrillion when the local currency was retired 2009 were paid a flat $5.

July saw President Robert Mugabe sign into law, the controversial Reserve Bank of Zimbabwe (RBZ) Debt Assumption Bill vehemently resisted by opposition MPs who felt poor Zimbabweans cannot be burdened with a $1,35 debt which accrued during the central bank’s quasi-fiscal policies, 2008.

During the year, the country also played host to French, Germany, British and U.S business delegations that visited the pariah state to scout for business opportunities.

Nothing meaningful has since materialised by way of tangible investment pledges from the countries.

In July, Vice President Emmerson Mnangagwa led his own Zimbabwean business delegation to Belarus where he had occasion to tie up deals amounting to US$150.

He also went to China to follow up on so-called mega deals.

The high profile September visit by Nigerian billionaire and Africa’s richest man Aliko Dangote who pledged billions worth of investments in power, mining and cement production was also hailed as an economic milestone although the deals are yet to see the light of day.

September also saw unprecedented power outages blamed on the country’s reduced power generation capacity in Kariba, plunging the nation into longer periods of darkness.

Industry warned this would further cripple the country’s ailing productive sector.

Chinese president visit

December witnessed the much hyped visit by China president Xi JinPing leading to the signing of mega deals.

Former Finance Minister Tendai Biti said warned the deals signalled the recolonisation of the country.

During the year, President Mugabe also broke his own record of globe-trotting when he and his office gobbled a monstrous US$33 million between January and September.

As AU and SADC chair, and deep in the twilight of his life and political career, President Mugabe’s visits were seen more for their symbolic nature than a real attempt to remedy his country’s waning economic fortunes.

Government’s much vaunted economic blueprint, ZimAsset also remained more of a convenient terminology for political slogans than a real panacea to a sagging economy.

The country’s wealth generators, agriculture and mining, remained largely constrained, thanks to poor planning, inadequate resourcing, poor governance and in the case of Marange diamond mines, government bullying.
Similarly, the national purse has remained buffeted by recurrent expenditure where over 80 percent is gobbled by civil servants’ salaries.

The cacophony of decent against Finance Minister Patrick Chinamasa’s pro-West economic recovery strategies by Indigenisation and War Veterans ministers Patrick Zhuwao and Chris Mutsvangwa was another highlight for the year.

Government continued to miss its economic growth projections, revenue collection targets while imports continued to outstrip exports creating a trade deficit of 2,9 billion for this year.

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