The Sunday Mail
Government has identified competitiveness as one of the factors crucial to Zimbabwe’s socio-economic transformation. A Cabinet committee chaired by Industry and Commerce Minister Mike Bimha has been tasked to reduce the cost of doing business and ensure fair pricing. And two weeks ago, Minister Bimha’s ministry and stakeholders met to craft the National Competitiveness Commission Bill, which will establish a panel to implement the strategy. International competitiveness programmes expert Mr Kevin Murphy has helped several countries down this path, and he spoke to our Chief Reporter Kudakwashe Bwititi on Zimbabwe’s prospects. Below are excerpts of that conversation:
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Q: What do you make of Government’s decision to set up a Competitiveness Commission?
A: This is line with the Government goal of achieving seven percent GDP growth and is also similar to what other high-growth economies have done: Brazil, Korea, United Arab Emirates, Singapore, USA and Ireland, to name a few. It will also come to the attention of the international community in a favourable way. This action, following on a seven-rank increase in Zimbabwe’s Global Competitiveness Index score, shows the world that something interesting is going on in Zimbabwe. This is likely to boost economic growth if it leads to practical initiatives and policies and to co-ordination among ministries. Zimbabwe has many excellent assets in agriculture, manufacturing, tourism, IT and other industries. The recently signed trade agreements offer positive prospects for Zimbabwe and this competitiveness commission can, if implemented properly, maximise Zimbabwe’s prospects to take full advantage of expanded access to markets through these agreements.
Q: How can actual economic growth be achieved?
A: There will be more co-ordinated strategy and policy to achieve a seven percent growth rate with corresponding reduction in poverty, expanded exports, increased foreign exchange, increased tax revenues and expanded employment. Also, there may be a stronger policy dialogue between the Government and industry sectors and clusters. Senegal issued its first Competitiveness Report. Tanzania is doing interesting things, although less publicly. Rwanda has focused on competitiveness for many years and Egypt has had a National Competitiveness Council for many years as well. South Africa also did a lot of competitiveness work after the Mandela transition.
Q: Your views on the draft NCC Bill and Government’s guiding policy?
A: I will leave this to Zimbabwe’s experts and legal authorities. My expertise is on competitiveness initiatives, reports and councils globally and in industry competitiveness in some 30-plus industries. While I have supervised the implementation of over 600 projects in 120 countries, I am not a lawyer and will leave it to those whose expertise in legislation. But from my expertise, I can give advice on the terms and service of board members. There is need for rotation, or you can recycle such people for continuity. So you may need to combine rotation and continuity.
Q: What challenges should Zimbabwe look out for?
A: Your country needs excellent and highly-motivated staff, not people seconded there because of connections; needs both local and international expertise; needs both policy advice and sound industry expertise aware of international opportunities. The Commission should convene industries, labour unions and other stakeholders and solicit their inputs, comments and constructive recommendations and respond to them.
Q: Recently, Zimbabwe went up the global competitiveness rankings. What does this mean and how can the country continue to improve?
A: Government achieved major progress in fighting inflation and is, in fact, ranked number one in the world. Its budget balance also improved. Access to primary education seems strong. These are encouraging developments. Zimbabwe is ranked number one out of 144 countries in combating inflation. My colleague, Dr Gift Mugano, whom we are working with for this competitiveness programme here in Zimbabwe, tells me that this came as a result of the Government move to adopt multiple currencies where the United States Dollar became “the official currency”. He has told me that this move resulted in inflation plummeting from the official figures of 231 million percent to single-digit figures, which, in many cases, remain negative. Dr Mugano says that what is more refreshing to note is that the prices continued to fall as economic agents continue to appreciate the real value of the dollar. Zimbabwe, since 2009, undervalued the United States Dollar through its overpricing habit, which was a cancer during the ZimDollar era what we may call ZimDollar overhang.
Q: There is general concern that goods and services are over-priced; what is your comment?
A: From what I have gathered from Dr Mugano, there is still evidence of the dollar being undervalued in Zimbabwe with unconfirmed reports indicating that we may be undervaluing the dollar by 20 percent. Going forward, we will continue to see the prices falling and a more defined deflationary environment, which will still make Zimbabwe number one again next year in combating inflation. This is both good news, theoretically, and bad news, practically, as deflation normally results in companies’ closures due to losses, which ensue.
