OPEN ECONOMY: Finding a role to play

30 Nov, 2014 - 00:11 0 Views

The Sunday Mail

Every now and then, it helps to look at the country as one big corporation that we all work for.

Together as citizens, we are involved in the business of national development. If not a precise match with reality, at least the analogy creates an idealistic bond between all our individual economic activities. We should start to consider such an ideal as a strategic factor for our economic growth.

A strategic factor is a competitive advantage. Loosely defined, a strategic factor is a competency that is unique to an enterprise, giving it an edge over competitors. You will find that in many countries with increasingly competitive economies today, there is a shared economic purpose and consciousness among citizens that they all have a role to play in the economic ascension of their country.

In his only public interview in 10 years, India’s richest man, Mukesh Ambani, made a profound and lasting impression when asked to explain the resilience of the Indian economy through the recent global slowdown.

He simply replied: “I am very bullish on India because it is really driven by the aspirations of a billion people and ours is a county where all the billion count.”

It’s my hope that we, as a country in Zimbabwe, start to look at our economy in such light. That being said, perhaps our policymakers can start to perceive themselves as having a managerial role in this big corporation of ours.

They need to equip themselves with the skills expected of astute and competent management. It’s my preference to evaluate them as such and use managerial metrics in some of their policy pursuits.

Last week, Finance and Economic Development Minister Patrick Chinamasa presented our 2015 National Budget. Now, understand that a budget is largely just a statement of intent; a prospective outlook of what would be desirable. As such, the minister should place great emphasis on “how” he aims to achieve these outcomes. After all, a list of goals is not a strategy.

For the budget to work, it must be strategically implemented, and that would be better executed if we approached it with the “national enterprise” perspective I have mentioned.

First, Minister Chinamasa should seek consensus from all stakeholders to his budget. In his managerial capacity, his budget must identify the relevant players in his strategy.

For instance, when he proposes to introduce export incentive schemes and lower corporate tax for companies that export, Minister Chinamasa must identify which industries are best positioned to export products that are desirable and competitive in foreign markets.

After that, he must collaborate with these stakeholders and ensure that beyond his offered incentives, our exporters are prepared to capitalise on his schemes.

So as to play their role as well, industry led by Industry and Commerce Minister Mike Bimha, should start brainstorming on what conditions require immediate adjustment to get export sectors going.

That involves serious analysis into production chains, labour force composition and financial structures in those sectors.

Export industries need to step up and play their role.

Second, Minister Chinamasa must bring consistency to his policies and capture the trust of policy stakeholders.

Even though it is commendable that the budget proposes the tax-free threshold to increase and tax amnesty to be extended, it is a sharp contrast to the aggressive fiscal stance we have experienced over 2014.

For us to get going as an economy, stakeholders need to have clarity on what impulses, mindsets and commitments are expected of them. It would be helpful for the minister to express his desire to stimulate economic activity by keeping money circulating amongst citizens and the private sector alike for a prolonged period.

For businesses, especially, tax planning has a large bearing on their financial planning. Can these stakeholders expect to go through an extended period where they can build up their financing structures without worrying about the tax-man?

On the same point of clarity of commitments, by establishing a Women’s Bank, what are we asking of and expecting from our female workforce?

Have we made it clear to women that their increased economic participation is a strategic part of our economic agenda?

All participants within our national enterprise need to be aware of what gear to engage their economic minds.

Third, Minister Chinamasa must follow through and ensure accountability by policy stakeholders. Capital allocation is just as important as capital efficiency. We have experienced unsustainable amounts of capital wastage, especially in state enterprises as shown by our audit reports, salary scandals and rampant corruption. Stakeholders receiving financial allocations must be obliged to conduct themselves with responsible stewardship.

National finances have a systemic purpose. Those are not going to be achieved if we do not capture the full value of every cent. When the Minister proposes a Sovereign Wealth Fund be primarily resourced from 25 percent of all royalties on mineral exports of diamonds and other minerals, which controls can be put in place?

A budgeted development assistance of US$480 million must be utilised for outlined purposes that have economic justification. Follow through!

If Minister Chinamasa scores high on these three metrics, then his budget stands a greater chance of achieving its desired outcomes. I concede that greater scrutiny on the budget can be made with more detailed perusal of the document, but a bonus point to consider is that every national budget carries a lot of decisions on resource allocation.

There will be plenty of opportunity costs. Some segments of the economy will feel short-changed or under-availed for capital. An engaged citizenry would encourage these stakeholders to take it up with the Ministry of Finance and Economic Development.

These stakeholders understand how imperative they are to the economy, and what role they have to play. For instance, the budget has no ministerial allocations.

Ministries such as Education and Youth must be proactive and create their own financial schedules that present a justifiable case for more financial resources.

They must present convincing economic arguments and show willingness to play their part in 2015.

You see, Zimbabwe has never had a problem with proclaiming policies and budgets. We have them as frequently and ceremoniously as any other country.

Our issue is that we fall short on implementation, and implementation is largely a result of inclusive participation by all policy stakeholders.

The time to simply sit back and listen to policymakers while Members of Parliament, industry and society dose off should be a thing of the past.

We need to start engaging in this national enterprise of ours.

We all have a role to play.

I suggest we take heed; in our current economic circumstance, the beatings will only continue until morale improves all round.

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