The Sunday Mail
Clemence Machadu Insight
Howdy folks!
I trust that I find you well.
There are a few issues I want us to look at today as we continue to seek optimal solutions for our economy.
First, the Mid-Term Fiscal Policy Review which Finance and Economic Development Minister Patrick Chinamasa is ideally supposed to have announced by now.
We could have been seeing new Press headlines by now.
Some newspapers that are struggling to come up with real news could have found something to write about, at least, especially those whose readership has been revealed by the Zimbabwe All Media Products Survey (Zamps) to be shrinking.
Now, we are told that Minister Chinamasa’s budget review statement has been postponed to early next month, a move that I have always been against.
Folks, this is not a smart move, not only to those newspapers I was talking about.
You see, postponing a budget review statement is akin to leaving business holding its breadth underwater in a wait-and-see stance.
At some point, they might start to choke and others might drown.
I think Minister Chinamasa’s presentation should always happen within the first two weeks of July so that business can come up with timely interventions that set the tone for the other half of the year.
His document is a very important one as it recalibrates the economy in response to the developments that would have taken place.
New assumptions have to be made, just as new targets and strategies have to be crafted.
Business usually slows down things during this time of the year in anticipation of the Mid-Term Fiscal Policy Review, and things will begin to pick up after it has been announced.
A good example is tannery company Wet Blue Industries, which was placed on judicial management a couple of years ago and was supposed to be cutting some ribbon this month.
But, lo and behold, the re-opening of Wet Blue, scheduled for this month, has now been put on hold as suppliers who provide it with raw hides await the policy measures Government will announce in the National Budget review.
The suppliers are hoping that the Finance Minister might lift the ban on the exportation of raw hides, which was imposed in 2014. If the ban is lifted, they are probably hoping for attractive export markets to supply, probably leaving Wet Blue and other tanneries in the blues.
I leave you to your imagine who else is waiting for the budget review, and how their collective anxieties empower the foot that presses the economic brakes.
But we do not want to brake at this point in time, we want to accelerate.
We want to be in the fast lane, getting there early since we are already late – better late than never.
Postponing the budget policy review also automatically means postponing the monetary policy, as it normally builds up on the announced measures in the budget review.
And why announce a policy in September, just a couple of months before the 2017 National Budget Statement is presented?
Minister Chinamasa, we, therefore, need your presentation as soon as yesterday, no further delay please!
iPRSP
What we already know, as we wait, is that there hasn’t been much activity in manufacturing, just as agriculture has also underperformed.
The Confederation of Zimbabwe Industries has already predicted that capacity utilisation is going to be flat this year.
The Zimbabwe Revenue Authority’s gross revenue for the half of the year declined by 9,31 percent.
Yet, in all this, we have to be more than conquerors, ensuring we set the tone that fosters achievement of the targeted economic growth rate of 6,6 percent over the period 2016 to 2018, as spelt out in the interim Poverty Reduction Strategy Paper (iPRSP).
This growth is expected to be anchored by an upturn in manufacturing and agricultural sectors.
An iPRSP is coming as a post-Staff Monitored Programme of the IMF.
Folks, it looks like the IMF is going to be our “guardian angel” for a while.
You see, an iPRSP summarises the current knowledge and analysis of a country’s poverty situation, describes the existing poverty reduction strategy and lays out the process for producing a fully developed Poverty Reduction Strategy Paper (PRSP).
So this is just laying the foundation for a PRSP. A PRSP is a document that then describes the country’s macro-economic, structural and social policies and programmes over a defined period to promote broad-based growth and reduce poverty and identify financing modalities.
My only hope is that the IMF will sooner rather than later refresh us with the much-needed dollars in billions so that we can bankroll the two sectors, which have been identified as reducers of our poverty.
Handiti apunyaira haashaye misodzi here?
Investment
Folks, I was moved by Mr Nigel Chanakira’s presentation to the Parliamentary Committee on Indigenisation and Economic Empowerment.
He was bemoaning how slow things are moving in the investment lane, with the eight laws that need to be amended to promote more investment yet to be amended.
His remarks came at a time when investment projects registered by the Zimbabwe Investment Authority last year have fallen compared to this year.
Said Mr Chanakira, “Our track record for attracting FDI is not necessarily a good one. We saw the speed at which Parliament was able to amend labour laws in 2015. I believe (investment is) a more urgent matter which will ensure more people are employed and should be treated with the same speed, if not more.”
Folks, Mr Chanakira is spot on here.
If we fought to save the few remaining jobs last year, then why should we now take this long to amend laws that can create more jobs, especially when we are yet to fulfil the job-creation targets that we have set?
Tapota dare reparamende, mhanyai nemitemo iyi.
Supporting protected sectors
The announcement by Industry and Commerce Minister Mike Bimha that Government is mobilising fresh low-cost funding to support selected areas of the manufacturing industry is a smart move that should be expedited.
Minister Bimha said the funds are likely to target critical sectors that are supported through Statutory Instrument 64.
Like I have pointed out before, if protection is not supported by other strategies, it will not work.
Take Proplastics, for instance, which has been lobbying Government to remove duty on the imported raw materials it uses in pipe manufacturing.
The company might have been protected, but it now needs further support to be competitive.
Government should establish an all-stakeholder committee that incorporates academia, economists, industrialists and others to look at each and every sector that has been protected and identify what needs to be done and monitor progress timely.
Later folks!
