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Opinion / Columnist

Zimbabwe: We rise and fall together

10 Oct 2018 at 17:23hrs | Views
The prophets of 'scorched earth politics are at it again. Suddenly, according to their reading Zimbabwe is back to year 2008. What utter nonsense! The scenarios could never be more different. If we are to be honest and objectively look at the situation obtaining in Zimbabwe, it would look like this. Zimbabwe has been a patient on life support for a long time. A victim of corruption, gerrymandering and inconsistent policy formulations. She has been for the longest of times been unwell, breathing through the use of artificial mechanisms that maintained a false sense of life.

Professor Mthuli Ncube, the finance minister arrives on the scene and begins urgent and necessary work to resuscitate the patient. Essentially, the transitional stabilisation programme seeks to bring an economy that works for everyone back to life.  The economy will need to stabilise before it grows. The patient must now strengthen her lungs by breathing for herself. That is Zimbabwe today.

Parliament and all other government departments, as well as business must play their national duty by acting to defuse the sneeze and latent symptoms. Zimbabwe is like a woman in labour who must push through necessary pain before the new baby begins a new life. Everyone needs to put their shoulder to the wheel. A working economy is good for everyone, whatever their political affiliation is. Similarly, if saboteurs are allowing to put sand in mealie-meal, (jecha musadza) it's bad for everyone.  Panic buying triggered by politically motivated and sinister fake news, as well as an opportunistic parallel money market must be corrected urgently and by all concerned.

Things will eventually stabilise. Zimbabwe is a resilient country.
For many years, Zimbabwe's institutions have suffered under sanctions. The economy became largely informalised. The treasury's rusty revenue collection system fell behind the changes as money nodes moved from the closing factories to other areas. But the demands on government money didn't decrease. The country was forced to borrow again to fulfil its obligation against a rising civil service wage bill, funding health, education as well as efforts to revive the economy through agriculture and mining.

The two percent tax introduced by the finance minister in electronic money transfer in the main is designed to address this gap. We can't continue piling debt on future generations. We all have to do our part in helping the country recover. The system as announced has important exemptions to help the poor in our society as well as business.

While it's only 2 percent, other countries in Africa are charging as high as 15 percent. And 15 percent is also the figure that was being proposed by the opposition in their manifesto for the 2018 election, but the Honourable Minister in his wisdom decided that would be too high a tax.
Given our structural contradictions in our tax collection systems, this is the only reasonable way to collect tax from the haves and help the have nots. The average person in the street will not feel the effects of the two percent tax as their electronic transfers are not frequent and the figures are generally very low. The tax will as a matter of fact nets those high-end companies and individuals who have for the longest of time have not been paying tax citing perceived losses and volatile business environment.

What is happening now!
The removal of life support on the economy has seen market forces begin to determine the true equilibrium of the economy. We are talking about an economy that owes more in domestic debt that it owes to the multi-lateral international money institutions. The country is breathing, but barely alive. The policy prescriptions going forward will see Zimbabwe move slowly back to its former self. The 'scorched earth politics' purveyors are trying to ring parallels between today and 2008. There is no relationship.  For starters the country was awash with American dollars made available by Lebanese diamond miners in Chiadzwa before the Chinese moved in. The 'bearer cheques' worked alongside the American dollars but because the politics were toxic, economic recovery was a far cry. In the new dispensation, the legitimacy issue was addressed by a relatively peaceful election. The dispute over the presidential aspect of the election was adjudicated upon by the highest court in the land and settled before an international audience on live television.

The 'MDC' Economic solution
Tapiwa Mashakada and Tendai Biti of the MDC Alliance think that the solution to Zimbabwe's economic challenges can be solved by joining the rand monetary union and hence adopting the rand as our day to day currency. This will not solve our problems for a variety of reasons. To begin with, Professor Mthuli Ncube is on point when he says the country need to self-dollarize. The solution to the economic challenges in Zimbabwe will not be solved by turning ourselves into a South African super market. We need to get our industries going, get our mines producing. South Africa is in recession and it has just embarked on a major policy shift in which the government is planning to take land without compensation. This radical move is likely to knock the economy and our attachment to this economy will be self-defeating. Attaching ourselves to an economy that is in recession is not in our interest. We need to allow ourselves to grow on our own terms.

Conclusion
The driver of the economic recovery agenda Professor Mthuli Ncube has already set the agenda. This is a minister who suspended purchase of ministerial cars and MPs jeeps because he understands the priorities. No minister of finance has done this in the past. It is important for all Zimbabweans to work together in the national interest. Sabotage, violence and unrest for political capital will not win the day. No one is investing in Somalia or Libya today, but they are queuing to come into Zimbabwe. From here we rise.

Source - Lloyd Msipa
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