Damp fiscal prospects

Source: Damp fiscal prospects | The Financial Gazette September 29, 2016

By Kapeza Kapeza
POLICY inconsistencies continue to plague Zimbabwe fiscal space.
We keep hoping for the “sacred” foreign direct investments that were threatened and, perhaps remain so, by the indigenisation policy which our custodians could not interpret coherently.
You could bet, any would-be investor would be rattled to even consider the prospects.
One topical fiscal concern is the pattern of our national recurrent expenditure.
At near 100 percent, all hope of capital investments are zero. The capital investment speaks to the infrastructural development requisite for general economic development. Needless to say, such development creates a basis for fiscal growth through creation of vast revenue stream. Prospects of reviving the local industry remain extremely remote. There, simply, is nothing left.
Revisiting the subject of policy disharmony, you may be persuaded to believe that inadequate consultations are made whenever any such propositions are made. It would not require an expert eye to have noticed such discord in the recent past.
The civil service wage bill and proposed amendments have been publicly denounced on more than one occasion.
 There was an outcry after the implementation of the import bans promulgated by the Statutory Instrument 64 of 2016. There are reports of proposal to assess and evaluate the statutory instruments, barely a year after implementation.
Matters of policy are far-reaching. The formulation process should be robust and sound enough to provide adequate comfort to the affected that such frameworks were constructed on legitimate grounds for the greater good.
Such legitimacy should then lure buy-in from the stakeholders motivated by the genuineness of the object of the said policies. A good measure of the legitimacy of a policy matter is the depth of the consultation process that will, naturally, not evade the stakeholders to be affected.
We may not be too sure of how exactly such processes are currently being handled, but we can be sure of a number of the following reactions if the process is inclusive:
• Buy-in and unreserved support from stakeholder
• Little to no variances in policy interpretation, and better still, implementation
• Ownership and confidence in the legitimacy of policy position
• Assurance of the greater objectivity to, generally, improve the welfare and wellbeing of the citizenry.
From a distance, the much clamoured-for foreign direct investments may, then, be stimulated. We should also expect that such inflows are supposed to be riding on solid policy platforms that seek to enhance value to the investors. This calls for thorough introspection in so far as financial discipline is concerned. It calls for a clear demonstration that, policies are bent on promoting value addition and creation through provision of an enabling investing environment.
Public proclamations and counter proclamations will not cut it. Confidence builds from inside out. An extensive, vigorous, inclusive and comprehensive consultation process is a sure help.
 Essentially, we do not even require to look very far for such. Business and professional bodies may play a critical role in advising the input into policy formulation.
These bodies better represent the interest of consumers and investors alike. There could be no better alternative.
In addition, it remains critical that even a seemingly sound policy may be impaired through the passage of time.
It remains prudent to, objectively, do the assessment and evaluation of the likely impact of the same before implementation. There is little applause for premature implementation of a policy that will, almost immediately require a “relevancy and impact” assessment and evaluation.
We could also be certain that incidences of possible trade wars would be kept at the minimum with our international trading partners. International funding institutions are likely to rate and rank a nation better with sound consistent economic policies.
Sincerity is apparent when all stakeholders concerns have been attended to and are represented in such pronouncements. Public humiliations will also, naturally, be a non-event.
Growing the fiscal space cannot be achieved by secluding the participants to the fiscus. Incorporating the participants also includes ensuring that a fertile investing field is provided.
 The process requires sowing seeds of trust through, as alluded to earlier, consulting  stakeholders to the fiscus. Long and painful as it may seem, it is the best way to achieve coherence and by extension, indirectly providing, assurance to investors.
Fiscal prospects rest in the ability to create and provide a solid foundation that promotes business and investments, in general. Further, this manifests through sound policies that supports business value addition and an apparent demonstration of fiscal commitments to ensure continued support to the business community as well as the general welfare of the citizenry.
We can as well forget any such chance, in the near future, if what has transpired in the recent past is something we will perpetuate going forward. Our greatest battle is to try and rebuild our battered reputation and make sure, we become an economic hub that every investor, local or abroad can yearn for.
Kapeza Kapeza is a senior business consultant for Franlink Consultants, a registered public accountants and auditors’ firm. He can be contacted at kkapeza@franlinkcons.co.zw/kkapeza@gmail.com