via ZimAsset: We need 40 yrs, says Mujuru.newzimbabwe.com 10 June 2014
VICE President Joice Mujuru has dampened hopes of a quick fix to the country’s faltering economy through the government’s five-year ZimAsset economic blueprint, warning it could take a lifetime to achieve the programme’s objectives.
| The Zanu PF government is under pressure to deliver on its election promises which include some two million new jobs at a time the economy is widely accepted to be going south.
A liquidity crisis that has held the economy back since dollarization in 2009 shows no signs of easing with cash-squeezed companies forced to shut down, throwing hundreds onto the already huge jobless heap. Aware of the potentially explosive situation, the government now appears to have decided to dampen expectations.
“Five years is too soon to achieve the objectives of ZimAsset. It is the beginning of a lifetime and can take up to 30 or even 40 years,” Mujuru said in Harare Monday according to the State-run Zimbabwe Broadcasting Corporation (ZBC). After winning a new five year term in office last year, Zanu PF launched its ‘Zimbabwe Agenda for Sustainable Socio-Economic Transformation (ZimAsset): October 2013 – December 2018’, vaunting the plan as the cure for Zimbabwe’s economic woes. So-called quick wins under the five-year programme were to be implemented between 2013 and 2015, whilst the second phase would cover the period 2016 to 2018 by which economic growth was expected to top 9.9%. But some ten months after the July 31 vote, critics and independent analysts say there is little sign ZimAsset is working. “The past year has seen more business closures in Zimbabwe than at any time since 2008; emigration has increased, as has the cost of living; and poor service delivery remains a national bone of contention,” said the UK-based Royal Institute of International Affairs in a recent report entitled ‘Zimbabwe’s International Re-engagement: The Long Haul to Recovery’. Former Finance Minister, Tendai Biti last week said: “The economic figures are not looking good. The current Zanu PF government is clueless and mediocre. “The biggest crime that this government of the day is doing is failing to pay civil servants their monthly salaries on time.
“The government payday is now fluctuating and the government is failing to honour civil servants’ deductions. It is not coping. We are seeing the government’s desperation in the increases in health fees and toll gate charges.” But if the views of the opposition and an institution funded, according to Zanu PF, by an enemy government trying to force regime change in Zimbabwe cannot be trusted, try the local central bank. Last month Reserve Bank of Zimbabwe (RBZ) senior division chief, Simon Nyarota told a meeting of industrialists in Harare that the economy would sink into the negative territory in the next year if the current decline was not arrested. “(The economy) is going to decline and it will be similar to the 2007/08 but this will be worse because we are dollarized so we do not have anything or a policy that will stabilise the economy immediately like what happened in 2009,” he said. One of the biggest problems crippling ZimAsset is the lack of funding with some $30 billion needed to finance the programme. Western countries, distrustful of President Robert Mugabe, remain reticent after the acrimonious fall-out of the last decade. Even Zanu PF’s all-weather Chinese friends also appear apprehensive about extending huge loans to a government that has piled up US$10 billion of debt which it is not even repaying. In February, Finance Minister Patrick Chinamasa said he was working on a comprehensive financial package with the Chinese but he hasn’t made reference to the deal since. The Chinese later explained they would not extend any large sums without collateral because “it’s in accordance with rules and regulations when granting any loan”. Outgoing economic and commercial counsellor at the Chinese embassy in Harare, Han Bing, told online news agency, The Source, that his government was open to a deal, provided Harare was prepared to hand over the rights to all future mineral revenues. “We are discussing whether we can take proceeds of sales for some minerals as collateral for the loans,” said Han.
“(We) and the team from the ministry of finance are now working at a technical level on how they can set up such a mechanism, how much the collateral would be and how much loans they (Zimbabwe government) can get. “We are asking for collateral because it’s in accordance with rules and regulations when granting any loan. This is the concept that we are now discussing with the government.” But that appears to be a concession too far even for an increasingly desperate administration.
Challenged Monday on where the government would get the $30 billion needed for ZimAsset, Mujuru, a war veteran and aspirant to the Presidency, reminded her interlocutors that the liberation struggle was fought without a penny. “We fought for this country and won with no budget; no money, no car, no bicycle,” she said.
“So this is going to be the best budget we have ever drafted and gives us no boundaries on what we need to do but when we talk of numbers, people might think we need billions within a day.”
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