Economy: Let’s stop fooling ourselves

By The NewsDay | Nov. 9, 2012 | 2 Min read

Since the formation of the inclusive government four years ago, Zimbabweans have been living a lie that the economy is on the recovery path.

Newsday Comment

Hiding behind figures, the government has been misleading people that it is doing something about the man-made disaster that is our economy today.

Despite the evident economic nosedive, senior government officials always abuse every public opportunity they get to claim that various systems are getting back into place.

But the Confederation of Zimbabwe Industries (CZI) 2012 manufacturing sector survey, whose results were unveiled on Wednesday, finally exposed the charade. The country’s manufacturing capacity declined to less than 50% this year due to government’s policy inconsistencies, shortage of electricity and a liquidity crunch, among a host of other factors. The CZI discovered that production volumes fell to 44,2% from about 57,2% last year, yet all along the government had been adamant that there was economic progress. According to the United Nations, Zimbabwe’s economy shrank by a third between 1998 and 2008 largely because of the country’s bad politics and mismanagement by President Robert Mugabe’s previous administrations.

Potential investors have been put off by those pushing for laws that clearly have no place in the 21st century such as the Indigenisation and Economic Empowerment Act.

Such laws, just like those enacted to grab productive land from farmers, were designed to aid Zanu PF’s political survival rather than to spur economic growth. CZI in its survey found that the dominant view among its members was that policy inconsistencies and ambiguity resulted in capital flight and reluctance by foreign investors to commit meaningful investment in the economy hence the decline. Their assessment suggests Zimbabwe is slipping back into that dark hole it first plunged into in 1997 when it intervened in the Democratic Republic of Congo civil war and threw money at war veterans. Mugabe, who is supposed to be steering the ship of state, has been in an election mode since he swore in the new government and the fruits of that campaign are there for everyone to see with strong indications that we are headed for an economic recession rather than growth.

What is disheartening about our situation is that the rest of Africa is pulling ahead as revealed by a report of the Institute of International Finance which coincided with the release of the CZI survey results. The report by the powerful institute, representing leading banks and financial institutions around the world, showed that most African countries were reaping the fruits of good governance with sustained economic growth rates. Zimbabwe has no excuse for not being in that league given its vast mineral and other resources. Our only Achilles heel is politicians who keep leading us up the garden path.