Another GNU hurts economy Hawkins

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University of Zimbabwe lecturer Professor Tony Hawkins says the effects of a second Government of National Unity (GNU) will be more detrimental to the countrys economic prospects.

Hawkins, who is also an economist, said the country was likely to have another GNU if it rushes into an election. He predicted that the country will undergo at least 18 months of political uncertainty given the performance of the inclusive government so far.

In his 2012 economic prospects projections at the Alpha Media Holdings strategic workshop early this week, Hawkins said Zimbabwe faced economic and political challenges.

Those who favour a GNU-two scenario to me the nightmare scenario overlook the danger of continued political paralysis undermining economic performance for another five years, Hawkins said.

Since the consummation of the inclusive government, the country has been in election mode, with President Robert Mugabe threatening to call for fresh polls anytime.

Industry and Commerce minister Welshman Ncube a fortnight ago said parties to the inclusive government could hardly agree on anything.

We are unable to reach an agreement, if we do it will be watered down, Ncube said. Coalition partners come from different world outlooks and I dont think we will ever reach an agreement.

Ncube cited the failure by the inclusive government to tackle the country’s $9,1 billion sovereign debt.

The inclusive government is divided with some advocating for the country to apply for Highly Indebted Poor Country status while others have been arguing the nation was too resource-rich to take that route.

Zanu PF blames the debt on Western sanctions.
Ncube said the recent introduction of 25% surtax duty by the Zimbabwe Revenue Authority was a sign of a dysfunctional government as it was not agreed on during consultations.

Finance minister Tendai Biti has announced plans to scrap the duty.

Zimbabwe is in the process of crafting a new constitution that is expected to lead to fresh elections. Business has questioned if there is a common vision in the inclusive government to deal with the economic challenges affecting the economy.

Today there are two main categories of downside risks political and economic, Hawkins said.
I do not pretend to be a political analyst, but for a meaningful economic narrative, one must have political scenarios.

He said there were a number of scenarios that could play out.

Hawkins said either a constitution would be agreed on and a referendum held later this year leading to elections by mid-2013 or there would be deadlock on the new charter.

This would force Mugabe to call for elections under the existing Constitution.

Alternatively, the life span of the GNU could come to end in April 2013.

Prime Minister Morgan Tsvangirai last week told the fourth session of the KM Financial Solutions CEOs Roundtable in Victoria Falls that it was unlikely that the tenure of the GNU would be extended.

Tsvangirai said extending the life span of the GNU would be denying citizens the right to decide their future.

I am hoping as we have agreed that we can achieve a roadmap to elections and have a smooth transition. There is no doubt that we have three parties in government and we cannot speak with one voice, Tsvangirai said.

He said the next election would be a watershed as it was likely to be decisive.

Hawkins said the economic downsides were largely external, but in addition to these a slowdown in South Africa will intensify competition for imports, especially if the rand stays weak while the dollar remains around current levels.