ZimAsset dead in the water

via ZimAsset dead in the water – The Zimbabwe Independent August 14, 2015

IT is two years since government adopted the Zimbabwe Agenda for Sustainable Socio-Economic Transformation (ZimAsset) economic blueprint touted as a panacea to the country’s plethora of challenges, but the policy has so far dismally failed to breathe life into the ailing economy, especially in terms of job creation.

Kudzai Kuwaza

ZimAsset, which is supposed to guide the government’s economic development thrust until December 2018, requires funding of US$27 billion and among other deliverables aims to create 2,2 million jobs by 2018.

But a July 17 Supreme Court ruling allowing employers to dismiss workers on three months’ notice without a retrenchment package has instead accelerated the rate of job losses in the country, with an estimated 20 000 employees being thrown onto the streets since the ruling was made.

This is far more than the 7 000 jobs lost through retrenchments last year.
The US$27 billion funding, more than seven times the country’s revised national budget for 2015 of US$3,6 billion, has largely failed to materialise. Only 7,5% of the amount was supposed to come from the budget, while 92,5% would have to be mobilised from external sources.

Sources of funding identified include joint ventures, diaspora resources, external financing as well as debt relief, according to the policy document.
The blueprint, which borrows from the ruling party Zanu PF’s election manifesto and previous national development programmes, identifies four major clusters, namely food security and nutrition, social services and poverty eradication, infrastructure and utilities and value-addition and beneficiation.
It comes on the back of a cocktail of economic policies that have failed to revive the country’s economy since Independence, instead transforming the generality of Zimbabweans from exuberant swimmers in the sea of optimism to huddled figures in the backwaters of despair. These include the Economic Structural Adjustment Programme, the Zimbabwe Programme for Economic and Social Transformation and the abandoned Medium-Term Plan that was supposed to run until this year.
Funding remains elusive: Finance minister Patrick Chinamasa returned empty-handed last year from a trip to China to try and secure financial backing as the Chinese reportedly wanted “bankable projects instead of policy pronouncements”. Subsequent attempts by President Robert Mugabe have also been futile despite the signing of several Memorandums of Understanding (MOUs).
All the same, negotiations are reportedly still underway, but Chinese leaders have expressed reservations over Zimbabwe’s high political, economic and country risks, as well as poor credit rating. Despite pronouncements by Mugabe and other Zanu PF officials that ZimAsset is starting to achieve its objectives, the situation on the ground paints an entirely different picture.
In fact, in his mid-term fiscal policy statement last month Chinamasa was forced to revise economic projections by more than 50% from the modest 3,2% he had projected to 1,5%.
He added that agriculture output was projected to decline by about 8,2% this year, with government in the process of importing 700 000 tonnes of maize. This is on the back of a debilitating liquidity crunch, low capacity utilisation, lack of cheap funding and unabated company closures, among other pressing challenges.
ZimAsset has been heavily criticised because it was crafted by Zanu PF without the critical buy-in from stakeholders such as business and labour, depriving the policy of national ownership.
These sentiments were echoed in 2013 by then South Korean ambassador Kwang-Chul Lew, soon after the crafting of ZimAsset.
Delivering a paper on the South Korean development model at the University of Zimbabwe under the Institute of Development Studies public lecture series, Kwang-Chul warned government the policy was too important to be left to a ruling party.
“South Korea has a tradition of democracy and pluralism,” he said. “The polices should not be from the ruling party only. Policymaking should involve an adjustment of opinion; it should involve the process of arguing and input from a number of groups.
“Policy is one thing, but implementation is another,” he added. “You can come up with a beautiful design or policy (on paper), but implementation of the policy and its impact are another matter.”
The country’s bleak outlook is a clear demonstration that ZimAsset has so far failed to make any meaningful impact, according to economist Godfrey Kanyenze, and time is certainly not on government’s side.
“ZimAsset is a paper tiger that has hardly seen practical application,” Kanyenze said. “We are still talking about it, but there’s nothing to show for it so far.”

He said what makes matters worse is that government, which is supposed to spearhead implementation of the policy, is locked in fierce factional fights as party hawks position themselves for the post-Mugabe era. The fights have led to the ouster of former vice-president Joice Mujuru, and the axing and suspension of some senior party officials loyal to her.

“The reality is that people in government are fighting, government is fractured. There is no one spearheading ZimAsset. Lack of implementation and the evil vices of corruption, rent-seeking and patronage have subdued ZimAsset to the extent that the would-be dragon slayer of underdevelopment has stumbled on its sword,” Kanyenze said.

Among those that have taken advantage of the court ruling to trim their workforces are quasi-government institutions that include the Grain Marketing Board, National Railways of Zimbabwe, Air Zimbabwe and Civil Aviation Authority of Zimbabwe, despite government saying it is against the loss of jobs using the ruling.

According to the Zimbabwe National Statistics Agency (Zimstat) 2014 Labour Survey Report, 94% of the currently employed aged 15 years and above are informally employed while 98% of the currently employed youths aged 15-24 years and 96% of the currently employed youths aged between 15 and 34 years were in informal employment. These developments will further deplete government coffers at a time it is struggling to pay its bloated workforce that gobbles more than 80% of its revenue.

Yet it is the failure to implement ZimAsset that has been the major problem according to former Zimbabwe National Chamber of Commerce president Oswell Binha.

“ZimAsset has failed dismally,” said Binha. “The minimum we should achieve, according to the policy, has failed to materialise.”

He said the policy is highly undercapitalised and is led by a government that “cannot walk the tightrope of budget lines to the letter and spirit”.

Despite reports that a team of Chinese experts is in the country to evaluate “megadeals” signed by the two countries with a view to implementing them and partly realising ZimAsset, the economic blueprint is likely to remain a pipedream.