'Economic crisis will liquidate Zanu-PF'

Former Finance minister Tendai Biti, who now leads opposition People's Democratic Party (PDP) says Zanu-PF has failed to justify its continued hold on power and the current economic crisis will liquidate in 2018.

He speaks to the DailyNews senior assistant editor Guthrie Munyuki and below are the excerpts of the interview.

Q: Zimbabwe finds itself in the throes of a debilitating economic crisis; where did the Government of Zimbabwe get it wrong?

A: Economics is the study of human behaviour, how the ordinary average person reacts and responds. The biggest challenge facing this economy is a crisis of confidence.

The biggest crisis facing this economy is a breakdown of trust, a breakdown of the social contract — people don't trust in the government, people don't trust and believe in President Robert Mugabe, people don't trust and believe in Finance minister Patrick Chinamasa and people don't trust and believe in Zanu-PF.

So, more than anything else, what has collapsed is confidence. There is a kwashiorkor of confidence in the national psyche, in the international psyche and we find ourselves in this deep structural problem. And part of the structural problem which we are facing is that we are not producing.

Economies function on output, on supply side production. Output in Zimbabwe has totally collapsed. Our GDP (Gross Domestic Product) in 2016 is going to be -3,8 percent, our GDP in 2015 was -1,8 percent, so we are now in a recession and the key characteristic in a recession is capacity of overcapacity.

There is excess capacity of collapsed companies (unused companies), excess capacity of labour that is not employed and excess under capacity.

Capacity utilisation is now between five percent and 10 percent. So we have to deal with the political question which is the confidence question.

We have to deal with the key question that there is no production, companies have shut down and employees have been sent home.

There is also a collapse in hope. When you are Finance minister, you are a dealer in hope and expectations, unfortunately Chinamasa doesn't understand that and can't do that.

Q: How can they instil confidence in this doubting public?

A: We need a holistic response to the economic crisis and we need a response that is honest. So we need a proper diagnosis so that we can get a proper synthesis; part of the challenge which we are facing right now is that the authorities have made a total misdiagnosis of the crisis and they are dishing out panadol to an economy that requires surgical operation, to an economy suffering from a cancer of the liver and therefore requires a total overhaul.

The authorities are changing air cleaners and oil to an engine that requires total replacement, so there is an absolute misdiagnosis of the crisis.

If I was in a position of authority, the first thing that needs to be resolved is of course the acceptance that we are in a deep, deep crisis.

The first thing that needs to be resolved is to send indicators to the economy that we are capable and we have to undergo deep reforms.

So these indicators must start with number one; the repeal of the Indigenisation and Empowerment Act so that we can attract foreign direct investment that is required. We can attract cheap money that is required.

Number two; is macro-economic stability. This government is totally irresponsible; it doesn't understand the basic rule of economics that you can't spend that which you don't have, so as a result they have been eating that which they are not killing. It's killing them! As a result the budget deficit right now is around 30 percent of the GDP and this is in the face of shrinking revenues.

The first quarter report of Willia Bonyongwe (Zimra chairperson) told us that revenue had underperformed by 25 percent and that the taxpayer in Zimbabwe is owing $2,5 billion.

So the government must embark on a regime of fiscal authority and part of that includes maintaining a primary balance; balancing books.

They are not capable of doing that. So you have got huge expenditure overruns including some that are own goals like the president's incessant trips.

Every time the president travels; he is taking along with him a minimum of $4 million. In an economy like this, that is criminal.

The third reform is the reform of the public sector wage bill.

It is criminal that the wage bill is now 91 percent of the total expenditure and the bulk of those are ghost workers.

When I was Finance minister,  we had 236 000 public servants now there are 550 000 public servants.

So ghost workers have to be eliminated so that the wage bill is reduced from 91 percent of total expenditure to 30 percent of total expenditure from 22 percent of GDP to about eight percent of GDP.

Number four is the reform of State enterprises.

We have got a milieu of these parasitic enterprises that are not serving any strategic purposes. So there has to be a reform of public enterprises.

Q: So for us to map our way out of this crisis, we need a stimulus package?

A: We need a stimulus package and we also need debt relief. What Chinamasa is doing is not debt relief; it's arrear clearance and he is trying to borrow in order to pay a creditor so that he can borrow more from that creditor which is absolutely foolish.

Chinamasa's strategy is based on arrear clearance; it's based on borrowing so that we get more into debt. It doesn't work.

We need a proper strategy for debt relief but Zanu-PF won't go to a proper strategy for debt relief because that will mean HIPC (Heavily Indebted Poor Countries) route is unavoidable.

But this government can't go the HIPC route because it will not pass the rigorous IMF Staff Monitored Programmes.

Secondly, they don't want the embarrassment of being labelled highly indebted and poor.

So what it means is that Chinamasa and everyone who is supporting us is leading us to nowhere.

It's like sprinting on a treadmill; you will go nowhere. So we are in cul-de-sac of lack of ideas.

The biggest challenge facing this country is lack of leadership and regrettably we are now being arrested, we are now a mirror reflection of a country led by a 92-year-old who hardly can walk whose basic concern is day-to-day reproduction: should I be able to wake up tomorrow, will I be able to eat, will I be able to walk with my walking stick? That's the crisis of the country. The country needs leadership renewal.

Q: Recently, smaller parties came up with the Coalition of Democracts (Code), why were you not part to it?

A: We are part of Code. We began the journey of Code way back in May of 2014.

And let me make it very clear that it is a fallacy to say this party is small and this party is big because ultimately we are all opposition.

As far as I am concerned there is no winner in a losing team.

If a team loses 5-1 and if a team loses 2-1, there is no better loser.

So what we need to do as all losers, all opposition political parties, we need to bury our egos, our hubris, our arrogance, our lack of wisdom and to come together to form a broad alliance that will give people of Zimbabwe a chance in 2018.

And it doesn't matter whether one party has got one person, another party has got 2 000 people, and another party has 20 million people.

Even Kisinoti Mukwazhi should be there, even Egypt Dzinemunenzva should be there. We have to liquidate Zanu-PF in 2018, go through a national transitional phase and then live to fight each other in a democratic Zimbabwe.

That's the basic challenge of the day. Are we able to come together? Are we able to define a programme of working together?

Are we able to define a transitional agenda to implement once there is change? Are we able to put people first? Are we able to recognise that this is not about political parties, it's about people?

Q: MDC recently held well subscribed marches, re-igniting talk that should there be a broader alliance, Tsvangirai has got to lead it; what's your take on that?

A: That's a separate debate. The question of who will lead is a separate debate. Let the best man or woman lead. Let the best man or woman be our face in 2018.

The biggest challenge right now is to get all of us in one room.

That's the miracle we are praying for — to get all of us in one room, agree on a framework and when we get ourselves in one room, let's all pass the sincerity test that I'm coming into this room with other political leaders, I agree that I might not be the leader and the face of the struggle in 2018.

That the men and women gathered in this room have got the right to choose the best amongst us; it could be a woman, it could be a man, let them choose.

The person who is going to lead and be our presidential candidate is the least of our challenges.

Our real challenge is getting together and form the framework of a broad front that will take the fight to Zanu-PF in 2018.

Q: Are you likely to see a swift alignment of the laws to the new Constitution before we hold elections to achieve some of the reforms you are agitating for?

A: I don't think so. Not with Zanu-PF. I don't see Zanu-PF reforming itself out of power.

There is no class that commits suicide and there is no elite that commits suicide.

So we have to push for reforms, we have to demand reforms and that is why one of the fundamental imperators (is) that the opposition has to get together now so that it can begin with one voice, to push for these reforms.

Q: You took words out of my mouth but anyway, why is it taking you so long to come together as one broader alliance?

A: Look, our society is battered right now. Our society is weak. Our society is battling for survival, our society is fatalistic.

Our society is hiding in churches, our society has fled to the Diaspora, so the opposition is also a reflection of that weak society. We can't be stronger than the society that is giving birth to us. But that's not an excuse; we have to come together.