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Zimbabwe way past time for boldness

24 Sep 2018 at 10:07hrs | Views
ZIMBABWE needs economic reforms. That has been clear for the last decade or so. In fact, what has not been clear is why a country that so desperately needs a change in economic direction has continued lumbering its way to fiscal Armageddon year after year.

The reforms have been promised, year after year, from the time of Tendai Biti as Finance minister in 2009 and then Patrick Chinamasa from 2013. There was consensus then, as is now, that there is need for the government to cut its workforce which gobbles around 90% of its revenue.

But even then, there was no consensus as to how many workers government — the country's largest employer — had in its employ, a subject addressed elsewhere on the pages of today's edition.

As far back as 2015, Chinamasa is on record saying that an audit commissioned under the Government of National Unity, which ran between 2009 and 2013, was never completed because of squabbles.

Retrenchment, under former President Robert Mugabe, was a dirty word and Chinamasa, more than anyone else, suffered for daring to take bold steps necessary to fix the creaking economy.

Chinamasa was a surprise pick for the finance portfolio when Zanu PF won elections that ended the coalition government with the rival Movement for Democratic Change formations.

After a stint as acting Finance minister when the government made its first steps towards dollarisation before the advent of the coalition government in 2009, he was viewed as a good pick, a rational guy who would make bold decisions.

He was practical, and stuck to the International Monetary Fund's staff-monitored programme, which had been agreed to by his predecessor Biti and doggedly pursued re-engagement with the western funders.

But, of course, he was hemmed in at every turn by Mugabe. Budget deficits skyrocketed, as government went on a borrowing spree — from the local market — compounding the foreign currency crisis and fuelling inflation.

In 2016, Mugabe publicly rebuked him for announcing a "Cabinet decision" on austerity measures which included job cuts, suspension of civil servants' bonuses, wage cuts among others, which would have taken some $200 million off its huge wage bill over three years.

A year later, Mugabe demoted Chinamasa to run a newly created Cyber Security ministry just before his ouster from office in a de facto coup.

So, this is 2018, Emmerson Mnangagwa has succeeded Mugabe as President and he has gone for a "bold" choice in Mthuli Ncube as Finance minister. Ncube, with an impressive CV and global standing, is facing the same choices his predecessors have faced.

"My preference is a fiscal shock, but there is what you call the political collar or the politics of policy making, which then slows you down. My preference would be more of a big bang approach because everyday counts in terms of cost," Ncube told journalists on the sidelines of an investor conference in New York, the United States, on Friday.

A "big bang" economic reform programme, he called it. Zimbabwe is way past time for bold decisions, but crucially for Ncube, he seems to be reading from the same script as his principal. Well, almost.

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Source - newsday
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