Presidential question time: The burning issues to raise

via Presidential question time: The burning issues to raise – NewsDay Zimbabwe September 2, 2015

After his recent State of the Nation Address (Sona), Parliament has invited President Robert Mugabe to grace the august house again and take questions arising from his sweet and short, if not devoid of detail, address.

That can only be right and should be encouraged. After all, he is the only one centre of power in the Executive, if not in Parliament. Others serve the country at his pleasure.

Hopefully, press reports that two of the others, in the persons of Vice-President Emmerson Mnangagwa and Local Government minister Saviour Kasukuwere were trying to block Mugabe from accepting the auspicious invitation — given the poor communication and relationship between the Executive and Parliament, in particular the loyal opposition side — are untrue. Why would they do such a thing? The President, no doubt, welcomes every opportunity to interface with his subjects, in particular the august house. He ran for the presidency, and won, to do just that.

If it is a question of his age or pressing demands, he can always delegate. After all, he is one of the few Heads of State — if not the only one — with the rare privilege and luxury of having two deputies quite willing and eager to work beyond the call of duty. They should seize the opportunity, if presented, to shed light on the President’s 10-point plan, particularly its due-diligence and its funding proposals.

Beleaguered as the President may be — if reports that his two acolytes did indeed try to curtail his hard-won right to respond to questions from his Parliament are true — he gave a hint of what worries him to the nation in his address. “In order to revamp our infrastructural inadequacies,” Mugabe said, “Government is pursuing both domestic and external alternative financing for key programmes under ZimAsset.”

He went on: “Zimbabwe is already positioning itself for major economic take-off in keeping with ZimAsset, which requires massive capital injection and rapid implementation.” He concluded that key paragraph by noting that “this has seen government signing [off] key projects with China covering energy, roads, railways, telecommunications, water, agriculture, mining and tourism”.

Good governance requires that the signed-off projects be laid before Parliament for its information, analysis, debate, wise counsel, amendment, if need be, and, or ratification. Rail-roading Bills through Parliament, as happened with the Constitutional, RBZ Debt Assumption and Labour Bills is highly improper. Parliament itself should be ashamed of the abdication of responsibility. A spineless and uncritical Parliament may be the biggest reason the Zimbabwean economy has all but collapsed.

The key words in the paragraph quoted above from the Sona are “massive capital injection”. The questions that should follow are:

How much is the country talking about? Will the nation be able to pay it back, and if so, how and when? And what of the outstanding sovereign debt which the nation has defaulted on?

In what form will the capital be: grants? equity (the best) and, or loans? And if loans, will there be any grace periods and what will be the currency of the loan and the interest rates? For most of these projects, it is usually folly to borrow in hard currency. At best they are better financed from the domestic fiscus and borrowings, both in local currency. That way, the domestic debt over time can be eroded by judiciously stoking inflation, quantitative easing and or devaluation. These options or tools do not exist for those desperate and reckless enough, if not highly irresponsible as to borrow wholly in hard currency. Strong as their economies are, of late the United States of America, Europe and recently China have all used these tools to fight the global recession. What will poor Zimbabwe use? Internal devaluation, and if so, how much can be generated from the pittance that is on the table?

What security will China demand for a “massive cash injection”? Securitisation of future cash flows from the projects receipts upon completion? Recent developments on the commodities front make this a hazardous undertaking. While China is committed to pump up to $40 billion each into Africa and Latin America, and has pumped huge amounts into infrastructure, agriculture and mining in these regions before as well as in China itself, the outcome has been global over-capacity of commodity production from iron ore, coal, steel, oil, cotton to soya beans, among others.

The world’s major companies too, such as BHP and Rio Tinto of Australia and Vale of Brazil have all been pre-occupied with raising volumes/production output, making a bad situation worse. That said, the potential in India and Africa itself should not be overlooked. If that be the case, then new strategies involving genuine regional integration may be what the market, the Chinese and the rest of the world, will be looking for.

Unfortunately, the Africans — in particular Sadc — seem to be slow off the mark. Asked in Japan recently as to what South Africa was going to do, given its sluggish economic growth, South Africa Vice-President Cyril Ramaphosa responded by saying his government had great faith in the Chinese government breathing life into the Chinese economy again, so that it can lift the likes of South Africa out of economic doldrums.

Missed was the fact that the Chinese economy is in fact healthy, growing at around 7% and the South African economy (worse, the Zimbabwean one), at below 2% projected growth in 2015, is the near lifeless one.

Finally, the House might want to know whether another Rudd Concession is in the offing?