State of the Nation Statement by Dr Dumiso Dabengwa

ZAPU Conference, Bulawayo Amphitheater, 17 December 2015
 
Invited guests
Leaders from our structures
Party members
Ladies and Gentlemen
All protocols observed
 
Let me start by welcoming guests who have come to grace our conference and to join us on this special day. On 17 December 1961, ZAPU was formed and this "Mother of Parties" proceeded to set the tone for the liberation movement and it pioneered the transition from peaceful to armed struggle that resulted in our independence. In a year from today, it will be 55 years since ZAPU was formed. As we go for that colorful milestone we have a challenging twelve months in which the country is facing unprecedented hardship brought on by over thirty-five years of ZANU-PF's battering of the economy and integrity of state structures. Even the few years of the hybrid "Government of National Unity" (GNU) failed to reverse this decline because ZANU-PF retained real power while ostensibly sharing it with MDC-T and MDC.

1.0 Congress postponed, not cancelled!

Today was supposed to be the third and final day of our 8th Congress. When we started planning for the Congress things were already hard; the conditions have become even harder for our members who are the main source of support for such events. We were compelled by circumstances to postpone our Congress while we find ways of raising funds to transport members that have to travel long distances from this venue. In spite of valiant sacrifices from our structures and contributions from friends of the party and well-wishers, we could not reach the minimum threshold to meet core costs. This is in spite of innovative measures designed by our Congress Planning Committee and preparedness of party members in the host province (Bulawayo) to use their own resources to cater for the delegates from elsewhere. I salute these combined efforts and this display of the ZAPU spirit of self-reliance which is the secret of our survival.

1.1 Building the conditions for Congress next year in a harsh environment

Our National People's Council (NPC) which has the authority between congresses, allowed us on 12 December 2015 to push forward the date of Congress and to use the intervening period to strengthen our structures so that they can cope with the requirements of a successful congress in the course of next year. Our National Executive Committee (NEC) will report to NPC in March 2016 so that there is stock-taking and setting of a date for Congress. I am confident that the experience we have gained this far will see us through. This party has endured harsh political repression before and after independence; and the reason for this is that the promise of a better life for all needs an unwavering champion like it.

ZAPU! ….Embusweni!

Nini? …. Khathesi!

We shall overcome bad governance and economic mismanagement.

2.0 Political transformation the key for escaping economic turmoil

Zimbabwe is experiencing economic hardship and facing a potentially disastrous post-harvest season, if indeed there will be anything to harvest in many parts of the country. In these circumstances there is a big role for ZAPU, a party that was formed to spearhead the aspirations of Zimbabweans and to defend equality and dignity for all the country's people. We have always been committed to responsible management of the economy and a political environment in which human and property rights are not toyed with for political expediency.

There was a promising start when we gained independence, when the safe hands of Dr. Bernard Chidzero was guiding economic policy formulation before populist rhetoric and politics destabilized the agricultural sector created an unfavorable climate for investment. I should say that the consequent downward spiral and de-industrialization of areas like Bulawayo is now history. That statement would be wrong because we are still living the nightmare; it is not history but will haunt us until corrective measures are in place. ZAPU and like-minded Zimbabweans have to bring about this change and not look for answers from those that have failed the country and are looking increasingly fractious and less and less able to provide even palliative solutions. Instead of trying to restore confidence, rent-seeking elements in the ruling establishment are embroiled in the culture of corruption and easy acquisition of assets without fear of legal sanction. They have defied the law and they see themselves as above the law.
 
3.0 Burning issues facing the people, for which Government has no credible answer

The increasingly painful structural regression of the economy over the last 15 years is a reality that can no-longer be denied by anybody sane, including those in the ruling party.  

The economic environment remains challenging, characterized by weak performance across major sectors, tight liquidity conditions and weak aggregate demand. Low international commodity prices and drought have also weighed in on key economic sectors.

The Minister of Finance has presented the $4 billion GoZ National Budget for 2016 expected to support a GDP growth of 2.7%, from 1.5% in 2015 (to account for a projected real GDP of $12.7 billion). This is premised on a policy thrust that emphasizes the need to strengthen economic governance. It is however our view that GDP forecast for 2016 remains and will remain in the negative territory.

3.1 No growth under negative economic indicators
 
The reason for dismissing the GDP forecast is that the economy cannot show positive growth when all economic indicators are in the negative.

- the banking sector continues to be saddled with high Non Performing Loans (NPLs)

-  tight liquidity challenges continue to strangle business

-  The stock market continues to post negative returns, losing $2 billion in terms of market capitalization for the nine months to September 2015;

-  In spite of talking against corruption in public, the top brass in government thrive on corrupt deals – that is rent-seeking behaviour;

-  There has been failure to separate economics from politics. In Zimbabwe  economics is held hostage by politics, quite unlike in the case of those countries that have succeeded in keeping economics out of corrupt deals (Kenya following the path of India, Ethiopia following China) to walk a wedge between politics and economics. ZAPU is not in any way looking for a model to separate corruption from economics – we advocate total eradication of corruption in the country.

-  ZAPU considers that the interest of the country and its people should not be the object of party political expediency. This is a core ideal among the objectives we fought for in the anti-colonial struggle and in the struggle for political and economic security of Zimbabweans. The country's resources should not be used as a political football for dribbling political adversaries and enriching those that toe the line.

-  If Zimbabwe must move ahead we need a transparent and accountable Comprehensive Finance Program for the country with the International Financial Institutions (IFIs) and with a buy-in from the people of Zimbabwe.

4.0    The way out of the current quagmire - getting out of the pit

More than ever before, the last few months of 2015 have demonstrated the depth to which the country has been sunk into political and economic despondency and desperation by the ZANU-PF regime. Internal turmoil has spilled over into the whole establishment; the center can no longer hold. A comprehensive transformation is needed, one that builds on people's economic, social and political agendas and is anchored on the following national issues:

4.1 Land

Without reform and strengthening of property rights in agriculture through granting transfer rights, there will be no unlocking of private sector involvement in the financing of agricultural production. To a farmer and a financier, a property right typically conveys the right to contract with other parties by renting, pledging, or mortgaging a good or asset, or by allowing other parties to use it (for example, in an employment relationship).

4.2 Debt

The country expects to clear its arrears which should unlock growth opportunities through the injection of fresh capital. The major question is, "How realistic is this"?  Inflation is expected to stabilize around 0% mainly as a result of appreciation of the US dollar.

4.3 Investment and engagement

Infrastructure deficit is likely to remain a major concerning factor underpinning lack of adequate private investment. There are no big projects expected to be completed in in the next financial year (FY16). This will leave the infrastructure deficit largely unmet, despite the much talked about MOUs with the Chinese. In particular, power and energy supply needs to be ensured for new investment. The Ministry of Energy and Power received 0.2% of Budget.

4.4 Macro-economic stability

Zimbabwe's economy has not been stable and growing. In economic jargon, there has been macro-economic instability borne by a 15 year wrenching structural economic regression in which the casualty has been strong informalization of the economy. The clear consequences of this have been:

-  On one hand there is dwindling revenue collection due to reduced tax base as economy got informalized, companies close down, job losses increase and growth declines overall

-  On the other hand, Government has an unrestrained appetite for consumption and spending:

a.   high budget deficit,  increasing government recurrent expenditure, acute government (domestic) arrears on virtually all its suppliers – utilities (power, telecoms, water and infrastructure), and others including a huge backlog on rental payments by government agencies.

b. De-industrialization of the economy

c. Failure to address the scourge of high cost drivers in the economy – among them monopolistic pricing structures mainly originating from utility costs, earnings and wage structure.

d.    Investment and growth have generally been too weak to improve the labour market – hence the root cause of unemployment is bad macroeconomic policy.

e.    It is the goods markets rather than the labour market that will lead to growth of effective demand and also make it possible to increase production capacity. The credible argument is that the most sustainable way of reducing unit labour costs by firms should be by raising productivity- this comes through capital accumulation and technological innovation. Naturally this comes via improving overall policy framework focused increased infrastructure investments, expanding support for private businesses and growing domestic market to boost aggregate demand.

4.5 Other macro-economic issues not being tackled seriously

There are other factors that need to be taken into account if and when Zimbabwe's poor economic status is to be tackled, and the living conditions are to be improved:

- The cost of doing business has to be reduced in order for us to be more competitive. The cost of doing business is high compared to other countries in the region.

-  Scandalous salaries of top management were paid and may be continuing, a sign of bad management of virtually all State institutions. This is compounded by losses due to rent seeking behavior.

- There are worrisome business indicators trending downwards in the last 15 years. This needs to be reversed.

- There has been a substantial drop in consumption levels in the economy – leading to companies across the board failing to meet operational costs and obligations – hence the number of company closures is still increasing.

- There is need for a political dispensation that will engage and embrace opportunities arising out of informalization of the economy. Countries like Kenya and Ethiopia have managed to embrace the dynamism of the informal sector in various sectors other than selling of second-hand clothes.

5.0 Investment climate and policy engagement

In the current era of globalization, Zimbabwe has challenges on both the local and the regional and world spheres whose resolution will influence positive change.

5.1. Major task ahead  

The major task ahead is to translate the current macro-economic stability into higher GDP growth through acceleration of private investment.

-  Zimbabwe has to establish trust in the business community domestically, regionally and across the world, in addition to building trust at bilateral and multilateral levels. Significant determinants in this regard include how Zimbabwe will walk the road towards servicing its debt obligations.

- The country has to find ways to attract new and old investors into long-term projects which will contribute towards an economic recovery programme. Consistency and a homogeneous voice are required on economic pronouncements. Discord is bad for business, not only in music.

5.2 Other Challenges

- Once more, rising informalization reflecting de-industrialization and a weakening economy need to be tackled.

 - High marginal propensity to consume (MPC) – both business and the general public face a severe liquidity crisis with no solutions in sight. There is no money, literally.

 - Domestic-borrowing biased financing mix of the budget and current account deficit should be corrected.

 - Measures are needed to reverse sluggish private investments and consequent poor job creation.

6.0 Concluding remarks: Key reforms, political change and economic recovery

If anything must be remembered from my talk today, it must contain my emphasis on unfinished business for which ZAPU was founded 54 years ago.

6.1 Unfinished business, repression and current political terrain

The colonial regime divided people according to race and class, and it also promoted a strategy of "divide and rule" among the black people. In the post-independence era a perverted practice of "rule and divide" has been employed, manifested most dramatically by the infamous "Gukurahundi" ethnic massacre of the 1980s which targeted Matebeleland and Midlands provinces. You will recall that this genocidal episode lasted many years in what were seen as ZAPU strongholds and was only ended when Dr. Joshua Mqabuko Nkomo decided to accept the odious terms of what was euphemistically called the 1987 "Unity Accord". When that is commemorated next week (December 22) you should remember it as a lasting reminder of how hunger for unchallenged power can needlessly lead to the criminal slaughter of tens of thousands of innocent people. It is only after this humiliation that the doyen of Zimbabwe nationalism was referred to as "Father Zimbabwe" in the ruling establishment. This tongue-in-cheek award of title, and selective recognition of "national heroes", is a permanent mark of bad faith of the ZANU-PF regime.

ZAPU is committed to protecting and expanding freedoms granted in the New Constitution. Among the most important issues in this respect is the implementation of reforms contained in that constitution. Electoral reform stands out as a key requirement because it determines the space for peaceful and predictable changes in government every so often. That is why as ZAPU we have instituted legal proceedings to compel relevant arms of government to facilitate, promote and defend free elections and all that go with it such as voter registration, a level playing field for all political parties in elections, and impartiality and accountability of relevant state institutions like the Zimbabwe Electoral Commission (ZEC).

Devolution of power is a cornerstone of accountability in local access to and control of resources. The New Constitution is weak in its provisions, but even this weak version has not been implemented. This is central to ZAPU's message as we gear for 2018 elections. Every area in this country has an unqualified right to development and survival according to its priorities and local realities. No remote central government can comprehend local preferences and felt needs.

7.0    Happy festive season
In the face of economic hardship and uncertain rains this planting season, you should strive to retain a generous spirit. Only those who sow hatred and misery will glory in suffering of others.