Mugabe flies out as Zim melts

via Mugabe flies out as Zim melts – The Standard.  15 June 2014  by Ndamu Sandu

President Robert Mugabe flew out of the country last week to attend the Group of 77+China in Bolivia, leaving behind a country in turmoil.

BY NDAMU SANDU

His junket to South America, which will gobble thousands of dollars, comes 10 months after Zanu PF got unfettered powers to rule Zimbabwe.

In its election manifesto, Zanu PF promised Zimbabweans heaven on earth saying it would create value of US$7,3 billion from the indigenisation of 1 138 companies across 14 key sectors of the economy. It said it would generate over US$1,8 trillion created from the idle value of empowerment assets unlocked from parastatals, local authorities and mineral rights.

It said its various initiatives would create 2 265 million jobs across sectors of the economy and “contribute to export earnings, food security and to the fiscus among many other benefits including urban housing, and construction on peri-urban farms acquired during the land reform exercise”.

But 10 months on, the situation on the ground remains grim — and is getting worse by the day, amid growing signs that the economy is melting down, piling more misery on already struggling citizens.

Analysts said it was frightful that the government appeared clueless as evidenced by contradicting policy statements, especially on indigenisation — the price of factional infighting in Zanu PF that has spilled into government.

An industrialist said in an interview yesterday that joblessness and informalisation of the economy had reached alarming levels.
He said there was need for foreign direct investment in infrastructure, manufacturing and mining.

“We are still talking about reviewing investment laws and speaking in different directions with no sense of urgency,” the industrialist said.

A local analyst said the economy has been contracting due to liquidity challenges. He said the move by government to shift civil servants dates was a sign that the situation is deteriorating and was likely to get worse.

“The solution from day one has been clear. We need to craft investor-friendly policies which are clear and consistent so that we may be able to attract capital. Secondly, just like the European Union has said, there is need for security of investments,” the analyst said.

“Government must promote and protect investments under Bilateral Investment Protection and Promotion Agreements (Bippas).”

Zimbabwe Congress of Trade Unions (ZCTU) secretary general Japhet Moyo said the situation was dire for workers, 9 000 of whom have lost their jobs since last year.

In addition to job losses, Moyo said, many cases were piling at the Retrenchment Board.
“We have been moaning on the number of applications, a clear indication that the industry is struggling,” Moyo said.

Moyo said the continuous shifting of civil servants’ paydays and the number of companies that were unable to pay salaries showed a particular picture of the state of the economy.”

The ZCTU boss said government should address the fundamentals including laws that attract investment, tax laws and favourable industrial relations.

“All these mean a lot to prospective investors. The informal economy is growing by the day. The question is: what makes people do business under the radar of the authorities but without paying taxes? People run away because government has stringent rules,” he said.

Willowvale’s plans to retrench have already received approval while newly appointed board chairman of the National Railways of Zimbabwe, Alvord Mabena said the board had to prepare “to take painful decisions to bring about the desired change” at the struggling rail parastatal.

In his acceptance speech, new Reserve Bank of Zimbabwe (RBZ) governor John Mangudya said the central bank had no tools to influence the economy directly under the multi-currency regime.

Mangudya said the bank’s strength “rests on relationship management, policy advice and the ability to put in place national beneficial financial structures to increase liquidity and resuscitate the economy so as to unlock value in the economy and to work towards meeting some of the critical objectives enunciated in Zim Asset”.

The outlook however remains gloomy with the World Bank lowering Zimbabwe’s growth projections to 2% this year from the 3% it had forecast in April.

Government projects the economy to grow by 6,1% this year and despite the new challenges facing the economy, it has not made any adjustments.

Last week, power utility Zesa announced a load shedding schedule which will be another blow to the manufacturing sector already beset by the absence of long-term funding.

Already, the manufacturing sector has warned that capacity utilisation was likely to dip to 30% this year from the 39,6% in 2013, painting a gloomy picture on the outlook.

The informal sector which caters for a big chunk of employees has not been spared from the power cuts.

In his 2014 national budget presentation, Finance minister Patrick Chinamasa said the old economy was dead and a new one, based on the informal sector, had been born, urging financial institutions to cater for the small to medium sized enterprises.

But at Bernito Complex in Mbare, Midreck Zengeni complains about his dying business. He said power cuts had hamstrung operations. Zengeni runs Zengeni engineering which manufactures window frames and scotch carts.

“We are working three days per week and this has affected our business,” he told The Standard yesterday.

Zengeni said very often nowadays, electricity was cut all day, only to be restored in the evening, meaning that they would have lost a day’s production.
He said in some instances when power was restored, it would be insufficient to run heavy machinery.

Lazarus Zokota, who is into furniture manufacturing, said the power cuts meant that they were unable to supply goods ordered on time.

“We are now having problems with clients. They think we dupe them and yet we cannot afford generators,” Zokota said.

In the banking sector, a report by IH Securities, a research firm, said a significant threat to the economy and the banking sector in particular is the deflationary pressure that the country was experiencing.

“Due to subdued levels of demand, local businesses cannot maintain margins and have in some cases been forced to decrease prices. In our view, this began in 2013 and has worsened in the first half of 2014,” the firm said.

“The concern is of course, that declining prices would further discourage investment in those industries targeted at the local market.”

It said low revenue on the back of this development would also place further pressure on firms that are already faced with viability problems.

“Highly leveraged firms are especially of concern as these will be facing higher real debt burdens.”

Chinamasa could not be reached for comment yesterday.

Former Finance minister Tendai Biti said Zanu PF should apologise to the nation for having failed to run the economy.

“The economy is now worse off than it was in 1957 and Zim Asset [Zimbabwe Agenda for Sustainable Socio-Economic Transformation] is a joke,” he said.

Biti proposed the setting up of a National Transition Technical Council to run the affairs of the economy.

“You don’t put a bunch of failed politicians into running a struggling economy because it will worsen things,” he said.

 

COMMENTS

WORDPRESS: 17
  • comment-avatar
    John Thomas 6 years ago

    Uncle Bob could not care less if the whole place comes to a grinding halt.

  • comment-avatar

    Whether he is here or not makes little difference to the economy or the welfare of Zimbabweans.

    Maybe if he increases the frequency of his flying that will increase his chances of exploding in the air. I am beyond caring.

  • comment-avatar

    lets hope its a one way ticket…

  • comment-avatar
    Petal 6 years ago

    Bet u Disgrace has hopped on the plane to shop till she drops – no comment how many people were in the delegation? Presumably hide more loot in Bolivia while he is there

  • comment-avatar
    zanupf fear me 6 years ago

    The begging bowl will be out saying his Asian bank accounts are too little. Laughing stock

  • comment-avatar
    Mlimo 6 years ago

    Mugabe obviously feels safer in the air the at home I wonder why? maybe he feels closer to where he’s going ? to Hell?

  • comment-avatar
    Mukanya 6 years ago

    The economic melt-down is not of paramount concern to him but losing political power is and a few souls can be sacrificed, if the latter is true.

  • comment-avatar
    munzwa 6 years ago

    WHAT GOES UP MUST COME CRASHING DOWN… WILL THE INDUSTRIALIST MENTIONED STAND UP WITH OTHERS AND SUPPORT PRESSURE ON POLITICIANS TO IMPLEMENT THEIR REMEDIES???

  • comment-avatar
    Reader 6 years ago

    Munzwa – No the industrialist wont as it is easy to talk at Luncheons and especially if you are paid to talk.

    What we need is ALL industrialists and Business men to DEMAND an audience with Mugarbage and tell him to pay the wages and salaries, Ha- Ha, that will be a joke.

    But really time the excellent Business people we have in Zimbabwe to a stance. That is if there are any left that are not on the gravy train already.

  • comment-avatar
    Petal 6 years ago

    The geriatic and his wife -sometimes picture them throwing a dart on a world map to see where next they can fly off too besides singapore

  • comment-avatar
    Mwoyondizvo Sinyoro 6 years ago

    Are you surprised really? Why did you vote for Zanu PF? If you cannot offer any sustainable solutions to undo what could have been avoided if all eligible voters boycotted the election or deliberately spoilt the ballots then stop whining and get on with your life. I am sick and tired of all this stuff about Mugabe. He seems to enjoy all the criticism and anger from Zimbabweans but guess what, it keeps him in the spotlight. he feels like a mini God.

  • comment-avatar
    Swagman 6 years ago

    What can he bring to the Conference, nothing!

  • comment-avatar
    lost birthright 6 years ago

    Flying is the closest he’ll ever get to heaven. Just to make me feel better I imagine that this is just one more flight less before he croaks.

  • comment-avatar
    saundy 6 years ago

    I agree with Biti that Mugabe should apologise to the people of Zimbabwe for ruining the economy, but so he & Tsvangirai for going into the 2013 election totally unprepared resulting in the country regressing 2008 levels.

    • comment-avatar
      Petal 6 years ago

      Dream on he will simply say- Zimbabwe is mine Leave my Zimbabwe

  • comment-avatar
    Petal 6 years ago

    would not be surprised if he has had the plane diverted to watch the world cup with his brats while the wife shops til she drops

  • comment-avatar
    protestor 6 years ago

    fly fly away Uncle these pipo are of no use to us