The Sunday Mail
Dr Gift Mugano
Last week, the Minister of Finance and Economic Development, Professor Mthuli Ncube and the Governor of the Reserve Bank of Zimbabwe, Dr John Mangudya, presented fiscal measures and the monetary policy, respectively.
These policies were met with massive outcry from the public.
Undoubtedly, the Minister of Finance and Economic Development and the Reserve Bank of Zimbabwe meant well. They want to take us to Canaan. However, it is not going to be an easy road.
Unfortunately, the nation was not adequately prepared for the pain. In short, we were ambushed.
To make things worse, the presentation of the policies left a lot to be desired — there was media blackout and as such, we didn’t have the opportunity to listen to the presentations. We had to struggle on our own to make sense of what the two gentlemen were say.
This is not acceptable in the Second Republic. Policies are implemented by everyone, that is civil society, business, academia, labour, Government, development partners and the general public. These are the constituencies that were not afforded the opportunity to listen to what is expected of them.
Dialogue is key.
If well-structured in an interactive process, stakeholders will understand the fundamental challenges on the ground as well as the root causes and required prescriptions, that is the policies.
Policy makers must take cue from medical doctors who never provide a medical prescription in the absence of a comprehensive medical report no matter how sick the person is.
Medical doctors always undertake x-rays, specimen tests and various diagnostics before they prescribe a drug.
Once they have a comprehensive understanding of the disease, they provide drugs that are aimed at stopping the pain, boosting appetite and the ones aimed at curing the ailment. They even tell you times to drink and why you should do so.
They always ask you if you are allergic to any drug.
After this thorough process of review of the patient’s condition and the recommendations, the patient agrees with the medical doctor.
They can make painful decisions based on the doctor’s recommendations, even if it means getting a leg amputated to save a human life. Dialogue makes this doable.
Policy makers must make use of this same process.
No one would question their recommendations if everyone was clear as to what needs to be done.
In this case, it feels like the Finance Ministry and the RBZ just amputated our legs through the 2 percent tax on our transactions as well as relegating our accounts to the local RTGS without bothering to explain to us why it had to be done.
Zimbabwe has twin problems – trade imbalances and fiscal imbalances. These are caused by one root cause – low production.
As it stands, every year we are importing unnecessary goods worth over $2billion in the form of tooth picks, diapers, cereals ($510 million), fruits, vegetables, paper, plastics and chewing gums.
The country is capable of producing all of this.
Through consultative meetings, people could have recommended measures aimed at substituting these imports with local production. Also, there was no need to allocate $50 million to the construction sector, which is not a serious problem at the moment.
The policies that effectively work in a dollarised economy to address structural rigidities are the industrial, agricultural and trade policies. The fiscal and monetary policies, which we are expecting to get miracles from, compliment the aforementioned policies.
In the absence dialogue, the policy makers are simply not going on the same wave length as everyone else, hence the current discord.
Dr Mugano is an author and expert in Trade and International Finance. He is a Research Associate at Nelson Mandela University, Registrar at Zimbabwe Ezekiel Guti University and Director at Africa Economic Development Strategies. Feedback: Cell: +263 772 541 209. Email: [email protected]
