Finance Minister Chinamasa got it right!

On 1 September 2014, Daily News, reporting on the aftermath of President Robert Mugabe's State visit to China under the headline, Mugabe returns from China with signatures, reduced the Presidential trip to a "begging trip" that had only secured "… secretive agreements and signatures but with no cash to revive an economy which is virtually on its knees."

"However, it is not clear how a broke government will repay China, and how the deals will ease the suffering of Zimbabweans blighted by shrinking incomes and failing social services. What China will get in return also remains another big question," further read the Daily News article.

But most importantly and very critical as if to self-correct the gloom picture created of President Mugabe's trip to China the Daily News went on to reproduce a quote by Finance Minister, Patrick Chinamasa, which they attributed to the State media.

 "No country sets aside a lump sum payment for no specific projects. Projects must demonstrate their ability to pay for themselves. You will not come to China to ask for money to invest in a project that won't pay for itself. That would not make economic sense," read the quote.

It is important to note that in China, the following big sectors are either 100 per cent or majority controlled by the state: oil, petro-chemicals, mining, banks, insurance, telcos, steel, aluminium, electricity, aviation, airports, railways, ports, highways, autos, healthcare, education and the civil service.
Yasheng Huang, at MIT, who spent years poring through official Chinese data and documents concluded that, " – the pure private sector in China at the end of the twentieth century, companies with no government ties involvement at all, was minuscule, equal to about 20 per cent of all industrial output."

What is the relationship of Zimbabwe's government to the afore-mentioned sectors and their contribution to the economy as a whole? Minister Chinamasa's statement in a way answers this rhetoric question.

Going by Minister Chinamasa statements one reaches a conclusion that in as much as Zimbabwe might seeks lines of credit to boost investment there is an urgent need to realign our state institutions into profit making machines. It is only after such re-alignments that as a country we can be in a position to identify projects that might need external funding. Most of our projects can be funded using internal resources.

What is refreshing though is the realisation that government's commitment to having all its structures working is not questionable. The Zanu PF government is alive to the fact that it should concentrate on putting its house in order, cracking down on their current harmful activities such as the ill-informed factionalism and corporate malpractice. On the later Government recently proposed a National Code of Corporate Governance which to large extents directs how state entities should be run?

What we see today through the National Code of Corporate Governance is the reincarnation of positive governance traditions and a hands-on role for the state. This kind of approach gives Government time to make an assessment of all its state enterprises and type of investment required. The internal strengthening of the state institutions using local resources gives them time to stabilise and have an edge to negotiate favourable contractors with potential investors in future unlike the current situation which exposes the country to further exploitation.

For example the New Limpopo Bridge which was recently handed over to the Ministry of Transport and Infrastructure Development following the lapse of the 20 year Built Operate Transfer (BOT) agreement was built at a cost of US$5 million. According to Government the private investor collected a net profit of over US$400 million during the said 20 years. But the million dollar question is whether in 1995 the same government failed to raise the US$5 million that was required to construct the bridge to necessitate the loss of US$400 million into foreign economies. Hence the need to rethink foreign investment and the quest to seek negotiations of favourable contracts.

This is why it is important that before Government progresses with its road rehabilitation and dualisation programme prioritises the re-establishment of the Roads Department. This is one department that was an envy of many and is responsible for the road network the country has. There is no reason why the country should be contracting companies such as Group Five South Africa whose employees are mostly Zimbabweans when we can resuscitate the department. What would be then important would retool it and attracting qualified personnel to its rank and file. It is gratifying to note that works on the Harare Airport Road are being undertaken by the Roads Department and funded by Zimbabwe National Road Administration (Zinara). This comes with huge savings on the part of government.

One major investment that could rock Bulawayo back into life is the resuscitation of the National Railways of Zimbabwe (NRZ). The parastatals is reportedly said to be in need of US$450 million to achieve a total turn around. For the past 15 years that money is being sought? Surprisingly there are reports that in the United Kingdom the same NRZ is seating on real estate worthy over 200 million pounds. In South Africa the same parastatals has huge platinum mines that remain untouched yet it is leaving from hand to mouth.
What of the investments by the National Social Security Authority (NSSA)? They stink of corporate malpractice

All said and done does such a country with a strong baseline of infrastructure really need to be reduced to a begging bowl? No! To borrow Chinamasa's words to get Zimbabwe at its best there is need to identify projects that can demonstrate their ability to pay for themselves and run with them.