via Will the IMF save Zim? – The Zimbabwean 29.10.2015
For many years the IMF has been the principal instrument of foreign development capital in Africa -and to this date Africans remain poor.
There is no evidence that the IMF has facilitated the emergence of sustainable industrialised economies anywhere on the continent. 50 years later, their job is still not done. Something must be wrong.
As long as Africa is masterminded by foreign governmental capital, Africa will not rise nor will poverty be totally eradicated. Only when we Africans learn how to package our own knowledge and apply it to meet our needs will we really see Africa begin to rise. We cannot continue to expect foreign governments and their citizens to take the responsibility for creating the Africa we imagine. That responsibility remains ours and ours alone.
It is my contention therefore that Africa can never rise to its full potential as long as it does not build its own developmental capital base and be free from the theories and machinations of international governmental development capital. If we are to write our own history, it is incumbent upon us to create a new paradigm of an Africa that offers value and legitimately attracts free market capital -without the need to continually depend on aid and tied loans.
Poorer by the day
In Zimbabwe today, we owe the IMF billions and yet no one is asking what happened to those billions released by the IMF supposedly for our development. As a result, we now have a highly indebted country that shows no evidence of any significant development. In fact we are getting poorer by the day with no end in sight.
Despite us having a significant asset base, we remain recipients of their munificence in areas where they choose to assist us – utilising their own methodologies and highly remunerated experts who have become permanent appendages of the African narrative. Aid and loans to Africa is indeed a lucrative industry, not for Africa’s poor, but for those who claim to know and are best suited to dispense the solutions.
There are currently anxious anticipations that things will get better in Zimbabwe once our IMF debt issues are resolved and they start releasing funding to us. We must borrow further in order to repay our debts to them. It is like giving an alcoholic more alcohol and hoping to solve his alcoholism. That is sheer stupidity.
The real problem
The real problem is that our economy has not transformed from a colonial dual economy based on the export of primary raw unprocessed products to an industrial one. So we remain vulnerable to those who determine the prices.
We also have a form of state capitalism that does not respect free market investment principles and believes that the state can manipulate information and the law and must have a decisive say and a significant stake in the market place. And our laws and institutional architecture are not geared towards attracting long term private capital. In order to do that we need to change our mind-sets and hastily acknowledge that long-term private investment capital is only attracted to competitive business environments which offer low risk and high return where there is some level of predictability.
More importantly, we must acknowledge that Zimbabwe has tremendous assets which offer value to private investors and our job is to deliberately unlock that value.
Dependence syndrome
The dependence syndrome on foreign governmental loans must stop as we recreate Zimbabwe into an industrialised economy driven by free private enterprise and free market capital investments. This can only happen when we begin to adopt a new narrative that says our nation can indeed lift itself out of the doldrums.
It is my considered view that the imperative to re-think Zimbabwe and its rather archaic economic model with its continued dependence on foreign governmental funding far outweighs the imperative for IMF aid, because we are most likely to prolong our vulnerability to foreign capital interests.
We will never be a truly sovereign state, and even after the inevitable demise of the current predatory regime we all anxiously await, we shall find ourselves stagnating and unable to live to our full potential.
Of course we need political change in Zimbabwe, there is no doubt about it. But as we seek that change, we must not forget that the thinking behind our economic system must also change lest we inadvertently recreate in another form the very problems we face today.
Politics matter, but in the end what will matter is what these politics are meant to achieve.
Do we use them as we have done in the recent past, or do we use them to unchain ourselves from the global financial geopolitics that see and treat Africa and Africans as always dependent and always needing assistance from foreign governmental funding?
IMF funding may be a temporary respite – but let us not overestimate its intentions and its potential to create the sustainable self-reliant developed industrialised state we seek. – Vince Musewe is an economist and author based in Harare. You may contact him on vtmusewe@gmail.com
COMMENTS
The argument presented above is a re-package of a very familiar theme. All of it false.
The Zimbabwe economy showed signs of real growth in the 90’s when IMF measures were followed. As soon as these measures were turfed overboard economy went into reverse. This is what happened, the facts cannot be disputed.
The reason some African countries cannot develop is lack of social trust, corruption, cronyism and other forms of criminality. There is no international conspiracy. If you look around some other Afican counties are developing quite rapidly
“Will the IMF save Zim?”
NO
Zim is determined to commit suicide as a nation
While R Judd makes a valid point about corruption etc., the only people who can stop that are Africans. Africans need to act in their own self interest, and be responsible for their own destiny. Africa will continue to be taken advantage of by foreign governments; it (Zimbabwe) remains colonised economically because it has not moved forward. The Economic colonisers are now the Chinese. But China is not interested in the well-being of Zimbabweans – it is interested in the well-being of China. All the corruption, etc perpetuates this. If Zimbabwe, and other failing African states do not want to be dictated to by the West (and the East) then they need to take responsibility for their own governance and economic well-being because the rest of the world is quite happy for chaos to reign as long as they get access to the rich resources that exist on the continent.
The real problem is not the failure to transform the economy from a “colonial” extractive and farming economy. Anyone who believes this is deluding themselves. The countries where industrialization has succeeded are those with large populations or with access to countries with large populations to sell their mass produced products. Large scale manufacturing requires massive investment, which in turn is facilitated by the certainty that the proceeds of this investment and risk taking will be for the benefit of those making the investment and taking the risk. This is not the case in Zimbabwe with a failure of the rule of law and a corrupt political “rentier” class demanding ever increasing bribes for doing nothing but preventing the illegal harassment of the investor/risk taker. That is the real problem.
I think melanin is a corruption enhancer.
What is the use of funding with a bunch of thieves at the receiving end? When thieves become beggers, they deserve our contempt.
Let Africans lend from Africans, in mutual respect.