#Zimbabwe economy haunts clueless Zanu PF

via Economy haunts clueless Zanu PF – DailyNews Live by John Kachembere and Kudzai Chawafambira  4 MAY 2014

Any hope that Zimbabweans had of a quick economic recovery were dashed last week when government admitted that it had failed to pay its external debt — amounting to over $10 billion amid concerns of more suffering in store for the people.

Economic analysts say with Zimbabwe’s poor debt payment record, it will be difficult for any international lender to extend credit lines to the country.

Finance minister Patrick Chinamasa last week said the country was failing to access new financing, which was critical for economic revival, because Zimbabwe was in arrears in servicing its external debt.

“No one wants to lend Zimbabwe money anymore because we have defaulted in the past. Whether we go to Zambia or to Malawi, it’s the same thing because we are indebted to these countries. We are on our own and we have to be more innovative,” said Chinamasa at the Zimbabwe International Trade Fair business conference.

The southern African nation — with a poor debt payment record and risks losing assets over failure to clear liabilities — is currently engaging International Monetary Fund (IMF) towards revising the country’s debt overhang estimated at $10,7 billion.

Harare-based economist John Robertson told the Daily News that government has to make new choices to change policies which can attract investors.

“People are reluctant to forgive debts, let alone offer any financial relief if we don’t change policies that got us into this mess. The more time we take to fix our economy means we will require more money to get things right,” he said.

Robertson indicated that government should prioritise rebuilding productive capacity but this requires a lot of capital.

“We can only address our economic inefficiencies by making sure we use internally-generated resources. At the same time, our behaviour is very bad, we need to change our behaviour in order to implement policies that are clear and can be able to attract investment inflows. At the moment we are in a precarious situation,” he said.

Economist Godfrey Kanyenze said the only solution to the economic problems lies in Zanu PF transforming the way it is governing the country.

“Many lenders are waiting to see how Zimbabwe performs on the IMF debt clearance plan agreed on last year before they can part with their funds,” he said.

Kanyenze said despite the agreement, the government is failing to implement resolutions that will put the country’s economy on the road to recovery and as such, no-one wants “to throw their money into a pit”.

“When an IMF team visited early this year to assess progress, they found that Zimbabwe had ignored some of the issues agreed on — issues such as reducing the public sector wage bill and minimising the vulnerabilities in the banking sector,” he said.

Another economist Christopher Mugaga said what is urgently required, without regret, is pursing the formalisation of negotiating the repayment of debt.

“Chinamasa remains in a Catch 22 situation. He alone cannot do much on the economic turnaround. On behalf of government, the Finance minister needs to implement the Staff Monitored Programme in good faith,” he said adding that as a country, we also need to align our policies with international standards.

“For instance, the ratio of government’s wage bill to the country’s Gross Domestic Product (GDP) should be reasonable and conform to global norms,” Mugaga said.

Socio-economic commentator Francis Mukora said it would be impossible for other countries to chip in with financial assistance given the deteriorating economic conditions in the country.

“I doubt if there is anyone who is willing to extend loans to a country with a bad reputation for failure to repay and is saddled with a non-performing economy — leaving Zimbabwe with no capacity to service such loans,” he said.

Zimbabwe’s efforts to secure $27 billion to fund its ambitious economic blueprint — the Zimbabwe Agenda for Sustainable Socio-Economic Transformation (ZimAsset) — were dealt a major blow when China indicated that it would not extend any budgetary support to the cash-strapped nation.

The Asian giant, generally considered an all-weather friend of Zimbabwe, said its foreign policy does not allow it to provide budgetary support to sovereign nations.

Cognisant of the worsening economic situation in the country, President Robert Mugabe recently pleaded with foreign investors to come and invest in Zimbabwe despite threats of the indigenisation policy.

Mugabe said the controversial policy, which forces foreign-owned firms operating in the country to cede 51 percent of their shareholding to locals, was misunderstood and he vowed to uphold property rights.

However, market experts argue that despite Mugabe’s calls for investors to consider Zimbabwe as an investment destination, a lot has to be done to assure investor confidence over the indigenisation policy.

A recent report by the Consultancy Africa Intelligence (CAI) maintains that “for economic empowerment programmes to succeed, policy implementation must be transparent for foreign investors to maintain or increase Foreign Direct Investment (FDI) flows into the host country.”

CAI, however, cautioned on the need for policy clarity on the protection of property rights.

“But there has been a significant increase in FDI outflows because the law, when enacted, lacked clarity on the protection of property rights,” read part of the report.

Zimbabwe’s failure to pay external debts is also cascading down into parastatals and individuals who are defaulting on servicing their loans.

This comes after Old Mutual Financial Holdings recently noted that nearly 72 percent of the $10 million loans disbursed by CABS to the youth under the Zimbabwe Youth Council (ZYC) since 2009 are non-performing.



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    Old Mutual policy holders will be happy with where some of their money goes no doubt !!

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    Poor ZANU PF – “they dont know, that they dont know “

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    kutongwa nonjazi 9 years ago

    Pride is the worst sin anyone fallible can indulge in. Mark the moment and day you wake up to discover that you now know everything….that’s the day you will have lost it all. Listening to advise is in most cases free. But vaMugabe be Zanu know everything….that’s amazing

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    Mlimo 9 years ago

    Mugabe said the controversial policy, which forces foreign-owned firms operating in the country to cede 51 percent of their shareholding to locals, was misunderstood and he vowed to uphold property rights.
    We heard that before liar! When you have no law how can you up hold it? When you are the ring leader why would anyone ever believe you again?
    Stupid zanupf.

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    John Thomas 9 years ago

    We have heard that the land reform exercise has been a success. We have heard that the indigenization exercise is a success too. The diamond bonanza has brought billions of dollars to its stakeholders.

    With all of these mighty successes why do the problems keep getting worse? Could it be that each described success is actually a failure? Seen in this light ZimAsset is a wish list of specific failures that the government wishes to implement.

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    obert 9 years ago

    The article is quite informative but the heading is not reflective. Zanupf is not haunted by anything because they simply don’t care. If the billions they stole are brought back to the country, everything will work out. We are told that we owe $10 billion. Where was it used? We need a breakdown of the projects where that money was used. Why are the projects not paying off?

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    The country is broke but its leaders are stinking rich!!!

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    apolitical 9 years ago

    What a gang of idiots, we demand freedom of expression to print propaganda and destroy the economy by the bad media trickling internationally, and when this happens its governments fault for not arresting us.

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    Please every Zimbabwean knows what has to be done to improve the economy ,it is simple economics.However ZANU PF does not want to do the right thing that will benefit the majority.They want to keep benefiting the minority.They are not prepared to do the right thing!Just a few simple decisions like property rights,prosecuting looters,reducing civil service,sorting out ghost workers,getting rid of parastatal are just a very few to mention.

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    We were misunderstood, you can invest safely, we will only steal from WHITE Zimbabweans, the rest of you have no need to worry!!!

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    Mapingu 9 years ago

    Now Chinamasa is openly admitting that that’s not about the ‘imaginary sanctions’ blues lies zanu pf has been parroting about over the years. It’s all about failure, failure, and failure in everything by zanu pf. Failure to run the economy of a super-rich country without relying on donors and creditors. Then finally failure to pay back all the creditors – IMF, Zambia, Malawi, SA, etc – and as expected all lines of credit are now closed.

    Of course, come election time the masses of Zim will be bombarded by zanu pf again with its sanctions propaganda. We will be told all and sundry are refusing to give us money becoz they have imposed sanctions on us – that is why you are suffering. May be we are going to be told that even are best friends – China, Zambia, Malawi, Venezula, etc have also imposed sanctions too. We are going to be told all these people hate Zim so much & they want it to be a colony again; blaaa; blaaa; blaaa….

    But one needs to ask a Zim that has just had a ‘resoundingly successful zanu pf agrarian reform’ is even expecting an of credit from countries such as Malawi which are much less endowed than Zim in terms all natural resources. Isn’t surprising from a zanu pf government which prides itself all being master of all.

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    roving ambassador. 9 years ago

    We now borrow from Malawi and Zambia, with due respect to the Zambians and Malawians, If we look at the resources we have in Zimbabwe, these guys should be borrowing from us. Its the albatross on our shoulder which is Zanu that pulling us down .
    Let freedom reign .

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      apolitical 9 years ago

      Not forgetting MDC backed sanctions of course even if you don’t understand them.

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    Cry Freedom Zimbabwe 9 years ago

    We need to take matters into our own hands now. What’s the point of waiting for 2018 or 2023 when the results are out already. Ask Nikuv. There are burning issues that need YOU! especially you in the diaspora to make a contribution for or against so that as Zimbabweans we can decide to move forward, or remain exactly where we are. And the other word for where we are is retrogression. Visit https://www.facebook.com/pages/Zimbabwe-Freedom-Force/1417023395232800?ref=hl and make your opinion known. Don’t forget to like the page if you do.

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    Tongoona 9 years ago

    ZANU PF must account for the US$10 billion IMF debt. Tell us how much is the capital debt and how much is interest. Tell us what happened to money from Chiyadzwa diamond fields and what happened to all the gold from open pits dotted throughout the country? Tell us too why the repayment record is tantamount to ignoring debt repayment. ZANU PF you will not be able to solve the country’s problems without the involvement of other citizens of the country. Do away with partisan political behavior and be part of the one nation of Zimbabwe. You will go nowhere with your Zanu PF way of thinking.

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    moomoo 9 years ago

    no one will lend a country that doesnt pay its debts and has no law and order and is run buby the most corrupt and. dishonest person in the world.dont lend mugabe a cent yyou wont see it again. tragically its the poor who wil ssuffer from this so called vatican angel

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    Truely speaking,Zanu PF has completely.Look at our youths they have no jobs,unemployment @ over 90%.Look at our roads,we have been paying tollgate fees for the past 3 yrs now,but look at our major highways and compare them with those found in S.A.Look at corruption,anywhere from police officers to soldiers to doctors to teachers to ministers to employees to all the citizens.Look companies are failing to pay their workers even the gvt itself is failing to pay civil servants.Zimbabwean Economy is completely dead