TNF noble, but not enough

Source: TNF noble, but not enough – The Zimbabwe Independent June 14, 2019

Faith Zaba

PRESIDENT Emmerson Mnangagwa last week launched the Tripartite Negotiating Forum (TNF), a platform that brings together government, business and labour to discuss challenges affecting the country. This is a step in the right direction as it gives labour, business and government a platform to discuss pertinent issues affecting the economy.

Editor’s Memo, Faith Zaba

It comes at a time when the country is reeling from skyrocketing prices, an acute liquidity crisis, job losses and company closures.

Under this forum government and the social partners can engage on key issues, such as price increases, labour remuneration and opportunist behaviour by business. While it is a very good initiative, on its own it does not resolve the economic and social problems bedevilling the country.

One of the key issues the three parties will engage on is the skyrocketing prices. However, what government has to remember is that rising prices is a manifestation of unstable fundamentals. When the fundamentals are stable, as the country saw between 2009 and 2015, prices remain constant. During that period, the multi-currency was still working, and hence currency and exchange rate stability.

The destabilisation started the moment bond notes were introduced in 2016 due to foreign currency shortages, caused by various factors, including dwindling exports, diaspora remittances and foreign direct investment as well as money laundering, which resulted in the siphoning of the United States dollars out of Zimbabwe. The introduction of the bond notes coupled with the citizens’ over-reliance on the RTGS and government financing certain expenses and the budget deficit using treasury bills destabilised the country’s financial system, leading to the volatility of the local currency and rising inflation.

The following issues need to be dealt as the three parties put their heads together to try and resolve the economic malaise:

• Key among the issues is the currency and exchange rate issue. The country needs a final solution to the currency crisis. Unfortunately, Mnangagwa’s announcement that his government will introduce a new currency at the end of the year only brings uncertainty;
• While the forum is a noble initiative, enabling the three parties to engage, the government must first deal with production levels, exports, inflation and interest rates;
• Government should play its part to provide an enabling environment for business through progressive, consistent and predictable policies as well as Ease of Doing Business reforms. This instils confidence in the economy,
  inducing its stability — mistrust between and among government, business and labour can be cured if government acts responsibly in terms of implementing sound policies. They say confidence is the cheapest economic stimulus;
• Corruption is a serious malady wasting away this country. Government needs to tackle high level corruption;
• Government must not take the TNF as an opportunity to lecture labour and business on its sins of omission and commission. It needs to deal with its hygienic matters — ensure an enabling business operating environment and most of the tensions between and among its labour and business partners will vanish;
• Business on its part should adopt innovation as a culture in order to reduce potential points of friction with government in terms of key enablers of production such as power and infrastructure. For instance, in terms of power, business should seriously consider embracing green power-generation technologies and other alternative power sources instead of pontificating ad nauseam about government’s strategic planning deficiencies in power development and planning.

Power can be generated from waste. In South Africa, PPC powers one of its cement factories using waste tyres. Solar is a quick win — extra capacity can be fed into the national grid. Government, for its part, needs to expedite enabling legislation on independent power producers. This is an example of how business and government, guided by Vision 2030, can jointly solve challenges; and

• Businesses cannot increase prices astronomically but deny workers wage increases. The pay gap within companies needs to be rationalised so that all workers get decent remuneration — this powers economic growth and reduces extreme levels of corruption.

While the TNF is a noble initiative, it is not enough. The TNF should not deal with symptoms, but should go to the root cause of the numerous problems afflicting the country.