The Sunday Mail
Dr Gift Mugano
Zimbabwe made an impact at the just-ended World Economic Forum in Davos.
President Emmerson Mnangagwa and his team met high-profile investors, leaders of multilateral banks such as World Bank, International Monetary Fund and Africa Development Bank and were able to charm over 3 000 participants as well as the global community which was following the proceeding.
I can say President Mnangagwa’s acumen left the whole world excited. It is clear that Zimbabwe is ready for business. However, as we continue to build momentum to attract investors and build on our successful participation at the WEF, we must ask ourselves regarding our next step.
Our next steps lie in the need for expedience in implementation of measures enunciated by the President in his inauguration speech which he keeps highlighting at every forum.
In this regard, we must demonstrate to the world that we are ready for business by decisively dealing with corruption, addressing the micro-economics of competitiveness and dealing with an archaic regulatory framework.
Corruption
Culprits are already being brought to book. I must admit, however, that the process is slow and not comprehensive. Beyond just arresting people, we must make sure that there is quick finalisation of cases.
More importantly, measures that deal with white-collar crime such as electronic Government should be put in place.
There should also be capacity-enhancement in institutions like the Reserve Bank of Zimbabwe, Zimbabwe Revenue Authority, police and general security services.
This must be worked on in terms of 100-day rapid results initiatives.
Competitiveness
Zimbabwe is lagging behind in the region in the provision and cost of water, electricity, information communication technologies and transport.
With respect to water, the challenges here are two–pronged, that is, availability of clean water and its cost. Investors want reliable supply of water and at the moment, reliability of water is not guaranteed.
Evidence on the ground shows that over 50 percent of water is lost through leakages.
Addressing the availability of water may require some time and is capital expensive.
However, the cost of water can be addressed overnight.
Zimbabwe has the highest cost of water in the region because it has fixed charges of US$$80 per cubic metres while our peers in the region charge nothing.
So, in cases where investors are planning to invest into a business which requires a lot of water, they may opt for other regional countries.
Going forward, Zimbabwe must scrap fixed water charges.
Energy
The challenge here again is two–pronged: availability and cost of electricity. With respect to electricity production, there is work in progress, but that work needs to be upped by attracting investors with interest in the energy sector.
The good news is that President Mnangagwa made that call in Davos. Respective ministries must follow-up. However, with respect to pricing, inasmuch as Zesa Holdings is already subsidising the nation, there is still evidence that our prices are on the high end when we consider rates for industries which consume excessive electricity compared to the region.
Here, Government should consider ring-fencing electricity pricing, especially in Special Economic Zones by charging rates comparable with regional counterparts.
Our ICT costs are relatively higher compared to other countries in the region.
Moreso, the quality of services in a number of cases is below our regional peers.
Here, the regulator — the Postal and Telecommunications Regulatory Authority of Zimbabwe — must rein in service providers.
Transport
The missing links in our transport sector are railway lines and a vibrant airline.
The good news is that new investors have partnered the National Railways of Zimbabwe.
What we need to see is expedience in operationalising that partnership. This will go a long way in reducing the cost of transport due to the economics which come with bulk carriage provided by NRZ.
The national airline must be capacitated to enable it to deliver its mandate, especially now when there is renewed interest in Zimbabwe and an expected boom in the tourism sector.
Politics
The President consistently reiterates Government’s desire to hold free and fair elections.
In Davos, some investors expressed interest in Zimbabwe but emphasised they will make concrete moves after elections. This clearly explains the importance of credible elections as a necessary requirement for international engagement and even fostering national cohesion.
Going forward, we must take concrete steps towards creating an environment for credible elections.
In this regard, Government must engage with all relevant stakeholders through dialogue and come up with actionable areas for the election roadmap.
The call by the President to invite the European Union and other interested parties outside Africa to observe our elections bolsters confidence.
Dr Gift Mugano is an economist and the registrar at Zimbabwe Ezekiel Guti University. He wrote this article for The Sunday Mail
