via Be careful, economists warn govt | The Zimbabwean by Nelson Sibanda
Government should borrow money only for production and warn politicians against making statements that make the market react negatively, says a senior economist.
Gibson Chigumira, the executive director of the Zimbabwe Economic Policy and Research Unit, accused the government of spending borrowed money on consumption at the expense of investing in infrastructure.
This ‘careless’ borrowing had limited the country’s capacity to secure loans and government should be more careful in its bid to resuscitate the economy. Borrowing was no longer an option as it attracted money at a premium rate of interest.
Chigumira said government should move speedily and implement rational economic policies, rather than needlessly dwell on talking about its suggested policy document.
“Policies should help the economy turn towards the value added manufacturing sector, which has a higher capacity to create employment and sustain the nation. Zimbabwe is too extractive biased as it mainly depends on mining,” Chigumira told The Zimbabwean in an exclusive interview.
He also urged politicians to desist from making political statements which would result in the market reacting negatively. Government’s continued undermining of efficient institutions and replacing them with the inefficient would haunt efforts to revive the economy, he added, urging those in authority to revisit the “glorious days” and study how success was achieved back then.
The World Bank country economist, Nadia Piffaretti, urged Zimbabwe to move from the extractive mode to manufacturing. “Zimbabwe should do the right thing by building its economy from basics of economics and international financial institutions would provide the necessary support,” she said.
No economy would survive by providing free lunches, added Piffaretti. She hinted that the World Bank would not easily write off Zimbabwe’s debt.
Daniel Ndlela, contract economist with USAID Strategic Economic Research and Analysis-Zimbabwe, said inconsistent policies were handicapping the economy, and government should respect rules.
University of Zimbabwe economics lecturer, Ashok Chakravarti, said a good rules framework such as rule of law among others would pull Zimbabwe out of its economic mess, but without them, there would not be any development.