Editorial Comment: Birth pangs end in joy

07 Oct, 2018 - 00:10 0 Views
Editorial Comment: Birth pangs end in joy Sunday Mail

The Sunday Mail

President Emmerson Mnangagwa has never been known for sugar-coated words.

He is breathtakingly forthright, bold and decisive. Everything he says will do, he pursues with purpose.

This is precisely why his interview with Bloomberg’s Caroline Hyde in New York on September 21 this year must be taken seriously.

He said: “We have to be very sober. It is true that our fiscal balance is bad and we must be honest to our people as what we want to achieve and to do. So there is need for us to apply fundamentals that may be harsh to our people, but are necessary for us to cross the bridge.”

Being sober in our circumstances means being alive to the fact that 90 percent of the money that is generated by Government goes to salaries.

The little money left is used to import electricity to light our homes, wheat for our daily bread, and fuel for industry and every day movement.

The leftovers are pitiably insufficient to repair roads, build modern infrastructure, buy drugs for our hospitals, cater for the vulnerable, or store away for the future.

Being sober also means being alive to the fact that after the sanctions imposed on us by the United States through the Zimbabwe Democracy and Economic Recovery Act, which make it impossible to access development finance from many international financial institutions, Government has borrowed heavily from the local market.

The borrowing has become unsustainable, since mopping up resources from the market through Treasury Bills means there is little left for private companies, which are supposed to anchor growth and development.

For banks, however, the interest rates on TBs are enough to dissuade them from lending to the private sector, which is risky, particularly in an environment of high interest rates.

But, most worryingly, the disproportionate issue of TBs that are not linked to economic activity has created a much more serious problem: a growth in electronic money that is not supported by real wealth.

The grim figures are in Reserve Bank of Zimbabwe Governor Dr John Mangudya’s Monetary Policy Statement of October 1.

Broad money stood at $9,1 billion as at June 30 this year, of which bond notes and coins accounted for $379 million — which explains the cash shortages.

In the same period, exports were measured at $2,7 billion, while imports were $3,4 billion — an unhealthy trade deficit. Correcting this anomaly by growing revenues and cutting expenses — which economists refer to as rebalancing the economy — is unavoidable and painful since it involves applying “fundamentals that may be harsh to our people, but are necessary for us to cross the bridge”.

It is something we can do, painful as it is.

At the launch of his Economic Freedom Fighters in on July 11, 2013, Julius Malema acknowledged as much.

“You can say whatever you want to say about Zimbabweans, in the next 10 years they will be the only Africans in the whole of Africa who own their country. Because why? They were ready to take the pain. Revolution is about pain; revolution is change, and change is painful. We are ready for that pain, we need that pain,” he said.

Land reform was painful. Economic reform will be painful.

But there is a constituency, one that threw its lot with the opposition MDC-Alliance before the July 30 elections, which seems to be confusing the new political administration with the old one.

It believes that the new Government doesn’t deserve the benefit of doubt.

Again, in an interview with CNN’s Christiane Amanpour on September 21, the President addressed this issue.

“If you look at me, then you would say I belong to the old guard, and that is a fact. But look at my Cabinet, look at the new Cabinet which I have. How many people are new in that Cabinet? You can see the direction which we are going.

“And I said this before the conclusion of the elections: that I’m going to bring in new people with expertise in various areas, women and youth. And I have done so. So I believe that people should examine what I am doing and not live on perceptions.

“I believe that the past should be left behind and we do our best for the future and work for the betterment of our people. To do so, in my view, I need the best brains the country can produce across the board,” he said.

So let us not allow naysayers and doom-mongers detract the nation from establishment of an upper middle-income economy by 2030.

The time for bold action and austerity is now well and truly with us.

A lean Cabinet that brings together a refreshing blend of high-end talent, practical experience, towering intellect, youth, energy and patriotism has started working and Government expenditure has begun to be rationalised.

As they do their work, the bullet must be bitten and we must start cutting our cloth to size. Belt-tightening is unavoidable if we are going to propel ourselves into a brighter tomorrow .

These are the birth pangs that end in joy.

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