Latest News Editor's Choice


Opinion / Columnist

Best economic models that Zimbabwe government can adopt

19 Dec 2018 at 22:17hrs | Views
Tinashe Eric Muzamhindo
Apparently we have the following challenges in our mainstream economy
-    Production levels are very low ( imports exceeding exports therefore balance of payments affected
-    Absence of Foreign Direct Investment ( FDI)
-    Liquidity crunch
-    No meaningful economic activities
-    The unemployment rate is extremely high
-    Economy squeezed, capital injection is critical

As a development practitioner, I thought of sharing some of the basic concepts which are critical for our economy. The Government of Zimbabwe can adopt the following resolutions for checks and balance on our fragile economy. We have best human resource within the region, we have precious minerals, we have everything so basically what needs to be done, is to apply proper remedy on the economy. Middle class economic target can only be achieved if proper and austerity measures are put in place. The budget was good but it did not address the concept of the poor. It was revenue focused other than growing the economy. It is supposed to be the vice-versa. I went through the budget document and made a strong critical observation which made me to conclude these economic models. The budget and austerity measures were majoring on minors, which are basically a flow to the current situation. For example widening the tax base and introducing the tax thresholds is not the solution, because we need to major on growing the economy and spur growth. The economy is squeezed, no major activities which can boost production and major re-direction expenditure matters. The budget reflected the already accomplished middle class economy. Growth of any given economy is gradual and it's a process. The success of any economy is rated on growth not revenue. Some major clauses of the financial bill should be re-visited.

Empowerment plan
My suggestion is let's come up with an empowerment plan in all economic sectors. I would suggest that every sector must participate in this grand plan. Production sector, energy sector, tertiary sector, planning sector and finance sector. There must be an empowerment model. I would give an example, we have MPs, senators, Ministers and senior Government officials who need cars at the expense of the Government. My suggestion would be let's say we have local talent supplying those vehicles probably the local assembly, and on the same node, we can have 5% for youth empowerment which they can be able to buy shares on the market, 5% for women empowerment, and 2% for the disabled. What this economy is lacking is empowering its own citizens. The economy is squeezing the same citizens. Government Tender Board can give a delicate solution, empowering citizens by saying this tender must be won by youths and women. This project is specifically for youths or women. So every idea must have an economic empowerment plan. Every ministry can come up with a plan for employing youths at a rate of let's say about 40% and women 35% the rest it must be open for the usual market. We must come up with empowerment schemes which reflect a broad based plan which accommodates everyone, with an inclusive approach. The idea is to keep everyone busy and have a participatory key approach. When we allow everyone to participate in the mainstream economy then we can avoid an outcry.

LIBERALIZING THE ECONOMY

What is important is make sure everyone is part of the economic agenda. For example fuel supply instead of it being limited to supply from individuals the market can be opened to other players. By opening the market to other players, you create employment, you create innovation and creativity and at the same time you can increase technology and revenues. There are so many people who can supply fuel in this country, so many potentials who can do that, so my question is why then is it limited to individuals and same people? So let's liberalize the economy and increase participation. Let's adopt this model, and within 6 months we can increase Foreign Direct Investment (FDI), and our GDP by 7.5%. Our economy lacks the concept of liberalism. Few individuals are in control of key economic sectors, and the rest are squeezed in the other corner. We need other economic players in every sector in Zimbabwe.

INCREASE THE LEVEL OF PRODUCTIVITY

We have so many imports, exceeding the level of exports there by affecting balance of payments and also regional debts. Currently we are not producing anything meaningful. We have gold, chrome, nickel, platinum and diamonds. Our major challenge is we are exporting these minerals in the raw form. So we are losing billions of dollars because of the quality of exports and at the same time, the human resource aspect. Zimbabweans in diaspora are the same people processing our raw. O what we should have done is to increase technology so that we use the local human resource and talent which will then increase technological advancement and revenue by payment of taxes by the local labour.

BUSINESS MODEL

In everything we come up with we must have a business model. We have signed so many deals, but if you check properly, we are losing a lot of minerals to purported investors because of rushing to sign economic deals before proper legal and economic frameworks. We need an economic council which must come up with legal, economic and political frameworks which must reflect the business operand. In other aspects, instead of getting 2 billion on a certain deal, we end up getting 700 million etc. going through the ESSAR deal, formerly ZISCO steel which was led by the then Minister of Industry , Welshman Ncube , the deal was not appealing and because of our desperation of investors, we ended up getting a raw deal. I think the Government must review all deals so that they can reflect a business model. When I looked at the budget, Agriculture was allocated almost a billion (900 000 000.00) mostly it was farm inputs and command agriculture. Instead of dishing our inputs, we can come up with a business model, of a win- win situation were the Government can get let's say 50% and farmers get 50%. What will the Government get from command agriculture? What will farmers get? There must be a business model. At the end of the day, Government needs revenue for day to day operations. As we speak we have over 5.6 billion huge budget deficit (HBD). We have this wide deficit because of huge risk in business.

Tinashe Eric Muzamhindo writes in his personal capacity as an academic and he is studying Doctor of Philosophy at Women's University of Africa ( PhD) and he can be contacted at tinamuzala@gmail.com



Source - Tinashe Eric Muzamhindo
All articles and letters published on Bulawayo24 have been independently written by members of Bulawayo24's community. The views of users published on Bulawayo24 are therefore their own and do not necessarily represent the views of Bulawayo24. Bulawayo24 editors also reserve the right to edit or delete any and all comments received.

Subscribe

Email: