via Where are these men taking us? – DailyNews Live by John Kachembere and Fungi Kwaramba 12 MARCH 2014Zimbabwe is descending into economic and social chaos and the government’s only response has been to shout populist slogans and people are now questioning where the current Cabinet is taking the nation to.
The response by President Robert Mugabe’s government to revive the country’s stuttering economy was in part familiar: more bluster by ministers around the much-hyped economic blue print, ZimAsset, which has failed to kick-start the moribund economy, and more scapegoating of sanctions.
The government’s policy framework document, covering the period between 2014 and 2018, ambitiously seeks to grow the economy by 6,1 percent this year, 7,3 percent growth next year, create value of $7,3 billion from the indigenisation of 1 138 companies across 14 key sectors of the economy, and unlock as much as $2 trillion in the economy.
It has been dismissed as utopia by analysts.
“ZimAsset is just a political statement,” political analyst Ibbo Mandaza said.
“From where can you get that 7,3 percent growth next year. It is just a Zanu PF manifesto, it is just a political statement which means totally nothing. It has no relation to reality. It is largely a reflection of Zanu PF’s election manifesto. I don’t take it seriously.”
Amid a desperate need for an economic bail out, Finance minister Patrick Chinamasa last month returned empty-handed from Washington after being denied funding by the International Monetary Fund (IMF), whose team is expected in Zimbabwe next week to review the government’s economic policies.
Chinamasa looks clueless and does not even know what economics is yet he holds the key to the most important ministry in Zimbabwe.
Chinamasa should be the face of economic prosperity but analysts argue that he cannot even run a rural bottle store, let alone an economy on its knees like Zimbabwe’s.
Even Mugabe’s key economic allies have deserted him, with Chinese envoy Lin Lin ruling out budgetary support to Zimbabwe.
“We don’t normally provide budgetary support to other countries but we try to help Zimbabwe in our own way,” Lin Lin told the Daily News last week.
In the seven months following Zanu PF’s landslide victory in the July 31 elections last year, economic growth projections have dramatically receded, more companies have collapsed with thousands of jobs lost, while the general standard and quality of living has sharply deteriorated.
According to the Confederation of Zimbabwe Industries (CZI) manufacturing survey, local industries are currently operating at below 40 percent of capacity utilisation, while the Zimbabwe Congress of Trade Unions says more than 9 000 people have lost their jobs since the beginning of the year following the closure of 75 companies, despite Zanu PF promising to create 2,2 million jobs in its manifesto.
Civil servants, who make the bulk of the country’s formally-employed staff, continue to live in abject poverty after Public Services and Labour minister Nicholas Goche failed to award them a salary increment. Actually, they were awarded an increment only on their payslips but the new salaries are not reflecting in their bank accounts.
Hospitals and schools are in a sorry state.
While millions of Zimbabweans, including the employed, are failing to access basic medical attention, Health minister David Parirenyatwa is hamstrung with lack of funding, with hospitals grossly understaffed, nurses struggling to get jobs while qualified doctors are earning a pittance of $283 per month.
The last time Parirenyatwa was minister of Health, at least 4 000 people died of cholera under his watch and he is back again in Mugabe’s Cabinet.
Corruption continues on a steep rise, and Zimbabwe’ economy is ruined by instability with widespread scarcity of foreign currency rapidly deteriorating standards of living throughout the country.
Zimbabwe’s unravelling should be a frightening sight to neighbours such as South Africa, which has supported Mugabe even as he wrecked what was once southern Africa’s second richest country.
Analysts say what is needed now is pressure on the government to change course and open negotiations with opposition leaders.
With the next scheduled elections years away, Zimbabwe needs to forge a political compact behind measures to arrest the collapse of the economy, analysts say.
Opposition leader Morgan Tsvangirai, who has supported that course, has little leverage and analysts say it is time for Zimbabwe’s neighbours to use their influence, before the chaos becomes uncontainable.
Pedzisai Ruhanya, the director of Zimbabwe Institute for Democracy, said Mugabe’s government “lacks legitimacy” domestically and internationally and therefore is hamstrung on implementing any meaningful economic transformation.
“The best way to address the problems the country is facing is to have credible governance and economic policies as well democratic political processes,” he said.
“The current problems clearly indicate huge deficits around these issues by the ruling party. Moving ahead, the country needs to return to democratic legitimacy premised on credible, free and fair political and electoral processes that will result in a legitimate and undisputed government.”
As the crisis has deepened, divisions within the ruling party have increased — as has internal disagreement within the opposition.
Without a stabilising force in Zimbabwe, both major political groups appear to be unravelling, putting the government’s viability at serious risk.
The World Bank this week said the mining industry has potential to attract $12 billion in investment over the next five years if the impoverished country gets $5 billion to recapitalise the sector, but warned investment levels remained very low outside the large-scale mining sector.
“This amount is less than half the potential of absorption of new investment by existing projects,” the Bretton Woods institution said.
But the institution said high exploration and exploitation fees, which are ranked among the highest in the world, could stifle growth.
Despite heading the Agriculture portfolio in the past 14 years, Joseph Made has watched as new farmers continue to destroy Zimbabwe’s pride as the bread basket of the region.
Made is floating and also does not know how to handle the key post but Mugabe seems to trust him.
The greatest undoing is the nationalisation of land by government under the unbankable 99-year leases, which farmers cannot use as collateral in securing loans from banks.
The World Food Programme says more than 2,2 million people need food aid to avert starvation.
Zimbabwe is entering its 13th successive year of serious food shortages. The country which once exported food and was southern Africa’s bread basket is now a regional basket case.
Last year, the country had to buy more than 300 000 tonnes of maize from South Africa and Zambia to avert food shortages.
Despite these imports, shortages of essential foods continued and the country’s hospitals are full of children with starvation-related diseases such as kwashiorkor.
Meanwhile, power cuts are affecting large parts of Zimbabwe, as Energy minister Dzikamai Mavhaire gropes in the dark.
The power outages are adversely affecting households and businesses. Mavhaire, is better known for urging Mugabe to quit as President than his prowess in the energy sector.
Major industrial customers have been asked to reduce their energy usage, and while larger businesses have switched to generators; many smaller enterprises have no back-up supplies.
Meanwhile, potable water has become a rarity, with the degradation of the water supply and sanitation systems becoming one of the root causes of the cholera outbreak that claimed 4 000 people in 2008 and is feared could rebound.
There are not sufficient safe sources of drinking water, and the new minister Savior Kasukuwere seems clueless about how to mitigate the crisis.
This has become an incredible breeding ground for diseases.
And local government and rural districts are collapsing under minister Ignatius Chombo’s watch.
The banking sector has not been spared the country’s rapid economic meltdown since the July 2013 elections, with seven banks being placed under surveillance by the central bank.
Then there is the minister of Tourism, Walter Mzembi, who after a good start, is now concentrating on bootlicking Mugabe.
He cried when he saw the picture of a young Mugabe and recently, at Simba Chikore’s bachelor’s party, took praise-singing to new levels.
But Mzembi forgets that tourism is supposed to be the third biggest foreign currency earner in the country after mining and agriculture.
Francis Nhema at indegenisation started well but has faded into oblivion as he seems not aware whether to turn right or left.
Walter Chidhakwa at Mines started well and
seems on the right track but as long as mining does not bring the earnings the nation expects, then he is destined to fail.
Mike Bimha at the ministry of Industry has been a monumental failure, companies are closing down daily, people are losing jobs and he is not visible.
Obert Mpofu has a huge portfolio at Transport but all he has done so far is hire new boards but there seems no end in sight for Air Zimbabwe, National Railways of Zimbabwe, Civil Aviation Authority of Zimbabwe and many other parastatals under him.
Dewa Mavhinga, Crisis in Zimbabwe Coalition chairperson, said the crisis the country is entrapped in “manifests in a virtually bankrupt government, a collapsed economy and international pariah status”.
“Government has failed to understand that its bad attitude towards human rights, transparency and accountability negatively impacts on the economy and on Zimbabwe’s economic relations with the international community,” Mavhinga said.
With Zanu PF still railroading its controversial empowerment policies, which have spooked investors, Mavhinga said populist policies were “self-defeating”.
While the country is endowed with rich natural resources such as diamonds, corruption is flourishing in the landlocked nation and analysts say unless Mugabe gets tough on graft, the country will continue to bleed.
“Prudent and equitable use and distribution of the resources Zimbabwe has will go a long way in improving the economic situation even before one talks of extending a begging bowl to the international community.
“For Zimbabwe to get its economics right, it must get its politics right,” said Mavhinga.