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Desperate Zanu PF spins another yarn

A PIPE-DREAM is defined as an ‘unattainable or fanciful hope or scheme’ which is premised on the fact that a goal is neither practical nor sustainable enough to be achieved, something that may be true for Zimbabwe’s ruling party.

By TATIRA ZWINOIRA

All over the world, as elections draw nearer, political parties roll out their manifestos meant to entice the electorate to vote for them. Often, these parties go for broke and make promises which at times are not met, with Zimbabwe being no exception as elections loom.

Zanu PF last week unveiled its manifesto which was largely themed around the economic recovery where it stated in the next 12 years the country would be a middle income earner.

“Zimbabwe is richly endowed with human and natural resources which present vast opportunities for everyone. An integral part of Zanu PF’s agenda for economic transformation is our unwavering belief that Zimbabwe`s greatest asset is its people,” Zanu PF’s said in the manifesto.

“Zanu PF’s vision is to transform Zimbabwe into a middle-income economy by 2030. Zanu PF will focus aggressively on re-opening up the country for business with the global community so as to rebuild our industries, create more jobs, eradicate the scourge of poverty and uplift people’s livelihoods.”

The only problem with these goals is that the manifesto, while good loaded with promises, is short on clarity in achieving them.

For example, the World Bank defines middle income economies as either lower middle-income economies which have a gross national income (GNI) per capita between $1 006 and $3 955 or upper middle-income economies whose GNI per capita is between $3 956 and $12 235.

Yet, Zanu PF is using a blanket term in defining which middle income status it wants to achieve knowing the economy is closer to a lower middle income economy.
The World Bank has placed Zimbabwe’s GNI per capita at $890.

As such, Zanu PF stating its vision of a middle income economy speaks more to a low middle income economy than an upper middle income economy as the latter would mean the economy growing by more than double by 2030.

For an upper middle income economy to be attained, the ruling party would have to sustain growth at 5,83% every year until 2030 based on the economic principle of ‘rule of 70’ used to estimate the number of years for a variable to double.

In its manifesto, Zanu PF promised growth of 6% per annum at a time several institutions have reported Zimbabwe is far from those growth levels, let alone maintaining them, due to years of systematic structural decay.

Even in other African countries, such as Ethiopia, despite it being the fastest growing economy in the northern region of the continent with growth of 10% per annum between 2005 and 2016, its government is aiming for a lower-middle-income status by 2025.

Africa Round Table chief executive officer, Kipson Gundani, said that the problem was no country outside of China has been able to maintain sustained growth, adding that the manifesto was not realistic although it was optimistic.

“From the positive side, that manifesto sells the optimism that this country needs at the moment no matter how unrealistic and ambitious it is, but the language and communique is now positive. It recognises capital as a key enabler for economic prosperity. It contravenes the usual mantra of black empowerment which never worked and is definitely open for business,” Gundani said, speaking in his personal capacity.

“Our problem is not the target but getting there; you need to progress, which is what Ethiopia has done and manages to moderate growth at around a 7% to 8% annual growth rate for some time now. So the issue is how do we sustain that? Do we have the productive pillars so that we do not have the ups and downs in terms of the growth? So there are many factors that go into it as supposed of clarity of a statement to say you want to achieve middle income status by 2030.

“It is simple to say that, anyone can say that…but you need vision content such as what goes into it the systems that have to be in place? What kind of people, skills, atmosphere, confidence levels do you need? You know, all those things come into play and that is what is called the vision content. The chemistry of creating that environment is what will be tricky. From the world over you can pick very few countries that have managed the same.”

Keeping the growth rate constant at 6% is based on increasing industrial capacity utilisation to 90% by 2023, $5 billion in annual foreign direct investment, $10 billion annual domestic investments, re-engagements with international financial institutions, and fiscal responsibility, among measures.

However, this approach ignores the structural decay that has taken place over years. Last year, capacity utilisation was at 45,1% with many producers struggling to stay open, FDI being on average $500 million per annum while domestic investments are lower.

Economist Prosper Chitambara said the targets were overly optimistic.

“I think the targets are overly optimistic and very ambitious and it is difficult to attain all of those deliverables within a period of five years and you cannot really plan beyond five years because you do not really know what might happen. So, I think that is a challenge with all political parties I would say in general,” he said.
“I think they (Zanu PF) are under pressure to probably woo supporters by promising some of these things, but you cannot really achieve what they are talking about so I do not really think that is attainable. Also, I am not sure the details are clear on how they are going to obtain that because at the end of the day it is about your plan, what is your strategy?”

He said more time was needed and simply saying to investors that you are open for business was not enough as the country was competing for FDI among other regional countries.

“I think these are just outlandish targets aimed at voters because I do not think that it is feasible. For me, what I always say you need a diagnostic kind of approach whereby you say what are the binding constraints at that particular time and you deal with them in a sequential and incremental manner because this big bang approach of attacking these issues at the same time can never work,” Chitambara said.

Economist, John Robertson said that the government needed to work on improving property rights so that investors would come in knowing that their investments were safe.

SOURCE: NEWSDAY

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