Government must reform to attract investment and revive economy

via Government must reform to attract investment and revive economy | SW Radio Africa by Tichaona Sibanda on Thursday, November 21, 2013  

The ZANU PF government must urgently implement reforms to revive the economy which is sliding backwards since the ‘disputed’ elections in July, according to an economist.

Luke Zunga, a Johannesburg based economist said it is imperative for the government to rethink its policies and introduce necessary changes to attract investors and donor funding.

“The government of Zimbabwe must be encouraged to advance policies that promote a secure investment climate and good governance,” Zunga told SW Radio Africa on Thursday.

After so many years of animosity between Zimbabwe and the United States, Zunga believes it is high time the ZANU PF led government swallowed their pride and begins to set the relationship on a more constructive path.

Political observers point out that the people of Zimbabwe have suffered greatly as a result of ZANU PF’s strained relations with the West, and there was need for the international community to help Zimbabweans by way of massive economic assistance, energy and infrastructure development.

“ZANU PF should acknowledge that there will be no economic growth without political reforms. Donors who funded the inclusive government have stopped pumping in money because they need to see reforms first before committing themselves,” Zunga said.

He added: “There has never been ready cash in Zimbabwe. The country survived on donor funding during the tenure of the unity government and the liquidity crisis has come about because the same donors will not fund a government that is not democratic.”

The economist said there is a possibility Finance Minister Patrick Chinamasa may be forced to apply to the International Monetary Fund for assistance, an option that will inevitably come with a series of conditions.

“If it is a government for the people, they should be willing to implement some of the politically-sensitive reforms demanded by the Western countries in order to secure billions of dollars to keep the economy afloat,” Zunga said.

Zimbabwe is facing a major financial squeeze as it seeks to raise funds to pay civil servants in an economy where revenues are thinning, while the unemployment rate hovers close to 90 percent.

The government is desperately seeking an infusion of millions of dollars to shore up the country’s finances, four months after ZANU PF ‘won’ by a landslide victory.

The relatively ‘stable’ economic situation under the previous unity government has been made worse after donors slashed funding pledges, due to concerns about electoral rigging and the slow pace of reforms. It’s feared the development partners could freeze more funds in the upcoming year if ZANU PF fails to speed up reforms.