The Sunday Mail
Taurai Changwa
THE local markets are starved of capital — fresh capital, to be precise.
It is this capital deficit that is manifesting itself in cash shortages for the generality of the population, and under-capitalisation for industry.
Though the Reserve Bank of Zimbabwe (RBZ) has been investing a lot of efforts to try and stimulate production and exports through various monetary incentives, it is not, however, clear whether this has the potential to arrest the current crisis that we have in the market.
Incentives for Diaspora remittances, tobacco and cotton farmers, including support facilities for the supply side of the economy, have gone a long way in stimulating production.
However, it is arguable that if Zimbabwe had normal relations with international financiers, it would have been able to get bridging finance and balance of payment support to avert festering problems in the market.
This is precisely the reason why Government should not tire in pursuing the Lima plan in order to unlock fresh sources of capital.
The Lima debt and arrears clearance strategy, which was hatched two years ago, is premised on the crucial need to repay the arrears owed particularly to big international financiers such as the World Bank, African Development Bank (AfDB) and the International Monetary Fund (IMF).
Already, the arrears owed to the IMF have been cleared. What is now left are arrears owed to the WB and AfDB, which amount to $1,6 billion. It seems as if Government has slackened in its resolve to see the plan through.
This must now change.
It is nothing short of absurd to expect the country to extricate itself from the current economic circumstances without foreign capital.
How can this be possible when Government wages gobble up more than 80 percent of the national budget?
This is surely not a healthy position.
Whilst it is a very good initiative to empower Zimbabweans, investor concerns should not be ignored.
Also, while the indigenisation and economic empowerment policy is prudent, it needs to be tampered with pragramatism.
It doesn’t matter if the cat is black or white as long as it catches mice, the Chinese often say.
All that matters is the development of the country.
It is encouraging that the Office of the President and Cabinet has already begun processes meant to make the local business environment as attractive as it ought to be.
This needs to be done expeditiously.
Yes, we might have bountiful resources in Zimbabwe, but we have not been able to exploit them to the benefit of the people.
We need investors from Britain, America, China and every other country which wants to help us develop.
It is time for Zimbabwe to rise, again.
There is need to start working towards the development of the country.
As the country opens a new chapter, Government needs to know that what most ordinary Zimbabweans need is a job that pays a living wage.
It is about time that Government begins working on creating a vibrant middle class, which is critical to spurring viable economic growth.
If this is achieved, all other things will work themselves out.
Most of the vendors will naturally disappear on the streets and reappear in re-opened industries.
So the onus is on us to create a conducive environment where potential investors can come into the country and invest freely without hurdles.
It is pointless for someone to invest millions of dollars without getting a meaningful return. There must be a very good return on investment for one to invest in our country.
Stability is also very critical, because it is pointless for one to invest large sums of money in a destination that is volatile.
All this needs to be attended to.
However, the grand plan should be to lift people out of poverty. And foreign investment truly makes a difference to people living in poverty.
It provides access to basic necessities and provides people essential conditions for living a peaceful and secure life.
What we need now is to reduce inequalities, increase economic growth and improve the living conditions of those in poverty.
Tied to the need to clear arrears in order to unlock funding is also the need to tidy Government’s finances — both for local and central Government.
If they are transparent enough, it could be possible for Government and local authorities to raise funds on international markets.
Only last week, Nigeria raised a $3 billion bond, which was warmly received by the market. It only shows that there is definitely an appetite for developing markets.
Zimbabweans have surely endured tough times for decades and many had to leave the country to secure better prospects.
All the capital which was drained from Zimbabwe needs to be recovered and even more.
Now that many Zimbabweans are now hopeful of the future, this hope does not need to be squandered; it has to be harnessed for the common good of the country.
Every Zimbabwean now needs to play a part in reviving the economy of our beautiful country.
Only good, viable economic policies can be the answer.
Let us work with the international community for a better Zimbabwe.
Taurai Changwa is a member of the Institute of Chartered Accountants of Zimbabwe and an Estate Administrator. He has vast experience on tax, accounting, audit and corporate governance issues. He is a director of Umar & Tach Advisory. He writes in his personal capacity and can be contacted at [email protected] or whatsapp on 0772374784.
