Multimedia: Headache for Chinamasa as he takes over Zimbabwe’s hot seat

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CHEROKEE-AMERICAN cowboy, comedian, social commentator, vaudeville performer and actor Will Rogers once said: “The minute you read something that you can’t understand, you can almost be sure that it was drawn up by a lawyer.”

Biti
REPORT BY BERNARD MPOFU

Closer home, lawyers have not only managed to master the art of arguing, bellowing Latin words in courtrooms as well as managing corporate politics in boardrooms, but they have also become influential figures in government.

President Robert Mugabe on Tuesday appointed immediate past Justice Minister Patrick Chinamasa as the new Finance minister.
A lawyer by training, Chinamasa succeeds another legal representative Tendai Biti from the opposition MDC-T led by Morgan Tsvangirai.

Other lawyers that have in the past taken up the Finance portfolio, albeit in an acting capacity, include Emmerson Mnangagwa.
What does this say about Mugabe? After criticising past ministers of practising bookish economics, the veteran leader, who won the July 31 elections, now believes that lawyers may have the oomph to drive the economy.

Forget the legalese associated with the profession, lawyers have will to control Zimbabwe’s Treasury for a cumulative nine years should Mugabe maintain the same Cabinet.

Picture by Philimon Bulawayo/Reuters
Picture by Philimon Bulawayo/Reuters

While Chinamasa is credited by his party — Zanu PF — for introducing the multi-currency regime when he was stand-in Finance minister in 2009, his new assignment will certainly not be a stroll in the park. This is certainly the Cabinet’s hottest seat at the moment given expectations from several quarters and the pressure Biti endured.

The Zimbabwe dollar became worthless due to a decade-long economic meltdown which ended after dollarisation.

The stakes are high and a host of problems continue to confront the economy. Chinamasa, considered a hardliner in the Zanu PF political matrix and chief negotiator during the intra-party talks, faces a daunting task of approaching organisations he has been fighting.

Picture by Nancy Mteki
Picture by Nancy Mteki

Whether Chinamasa will attract funders especially after clashing with the United Nations Development Programme on several occasions and whether he will eat the humble pie and seek technical support from them, only time will tell.

While inflation has slowed down on the back of a weakening rand, the Zimbabwe Stock Exchange (ZSE) seems to have taken a knock after the polls.

Year-end economic growth rates have been revised as mining, manufacturing and agriculture continue to underperform.

It would be interesting to see whether hawkish Zanu PF politicians will blame Chinamasa on the underfunding of agriculture, or they will just blame it on the sanctions.

As former Justice minister, Mugabe could have considered Chinamasa’s political gravitas in stamping his authority when vultures knock on the door.

Facing pressure from a relentless civil service, Mugabe has already promised uniformed forces a pay rise despite stagnating revenue.

Analysts said if the government suddenly secures more revenue to fund the huge public sector wage bill as promised by Mugabe, then earlier claims by the outgoing Finance minister of an existing parallel government during the tenure of the just-ended coalition government could be true.

Currently operating with limited fiscus, the new Finance minister will have to strike that balancing act between populist measures and austerity given the trickling capital inflows.

Official figures show that government revenues have stagnated with recurrent expenditure accounting for 70% due to low business activity.

Revenue collection during the period between January and June amounted to $1,807 billion against a target of $1,7 billion resulting in a positive variance of 0,8%.

Tax revenue accounted for 91% of the total revenue, while non-tax revenue accounted for the remaining 9%.
Revenue from diamonds, according to Biti continued to underperform.

A salary hike for the civil service will not only reduce fiscal space, but expose the new government to the ills of the dollarisation which came through the back door.

A ballooning import bill currently trebling exports has further worsened the country’s balance of payment position.

Zimbabwe is also saddled with a $10,7 billion debt which represents 103% of the Gross Domestic Product.

Government figures show that over 70% of this debt is accumulated arrears.

Zimbabwe has been defaulting on its international debt obligations since 1999.

As Chinamasa strolls to his New Government Complex offices, there is no price for guessing what will be going through his mind. He has less than two months to craft the 2014 National Budget, which would be a compass on Zimbabwe’s economic policy.

It remains to be seen whether he will be equal to the task, whether he will be popular with the civil servants and whether the war veterans who had taken to the habit of demonstrating and knocking at Biti’s doors will do the same. Let’s wait and find out.

ZIMBABWE’S CHALLENGES

More than 70% of the population are employed in the Small and Medium Enterprises and close to half of the population are directly or indirectly involved in the sector according to the Finscope survey 2012.

OWN CORRESPONDENT

The informal sector accounts turnover is at $7,4 billion. This means that the new government cannot continue to ignore this critical sector of the economy.

The agricultural sector has to be revived as the country now relies more on imports when it has the capacity to feed itself.
Figures from the Ministry of Finance shows that $2 billion is required for the sector to revive the sector.

The revival of the agricultural sector will help the manufacturing sector as it will start producing more goods and more people will be employed and more taxes to government and poverty will be reduced.

The government should work on the competitiveness of the country with various stakeholders such as business and labour to resolve the uncompetitiVe nature of the country’s production processes. Below are the immediate challenges for the new government.

Picture by ZimbabweElection.com
Picture by ZimbabweElection.com

‘CHINAMSA SHOULD GROW ECONOMY’

ZIMBABWE’S newly appointed Finance Minister Patrick Chinamasa faces a herculean task of stimulating economic growth against the backdrop of growing push to indigenise foreign-owned companies operating in the country, independent economic analysts have said.

REPORT BY VICTORIA MTOMBA
In an interview with NewsDay Business, local economist John Robertson said the new Finance Minister should ensure that the country, currently ranked as one the worst investment destinations, should craft policies that promote foreign direct investment.

“Chinamasa has to improve tax revenue through the increase in the amount of business. There is need to increase investment promotion to provide equity capital and loans that will become tax payers,” Robertson said.

He said the country should follow the International Monetary Fund Staff-Monitored Programme signed in June to improve the country risk as well as prospects of accessing long-term capital from multilateral finance institutions.

Picture by Aaron Ufumeli
Picture by Aaron Ufumeli

Robertson added that the issue of credit has to be looked at as well. The country’s debt overhang is at $10,7 billion.

He said there was need to address challenges besetting the agriculture sector to contain a growing import bill.

Critics said the sector plunged into doldrums after the chaotic land reform programme at the turn of the millennium.

“Banks will need to grow and attract more capital from outside the country and the threats of indigenisation from international banks needs to be stopped as a way forward.”

Picture by Hilary Maradzika
Picture by Hilary Maradzika

According to a World Bank report, fiscal revenues have stabilised at $4 billion and Treasury can no longer keep the pace of the past fiscal recovery to absorb new commitments.

In the first half of 2013, revenue increased $1,81 billion through non-tax revenue which came from licensing fees in the telecommunications sector.

The report states that tax revenues were lower due to the slow down in the economy on the run up to the election in July.

During the first five months of the year, the economy was on a decline path resulting in former Finance minister Tendai Biti revising the economic growth targets to 3,4%.

Picture by Cynthia R Matonhodze
Picture by Cynthia R Matonhodze

Zimbabwe’s economy has been registering strong growth since the formation of the inclusive government in 2009. Capacity utilisation for the manufacturing sector has been on an upward trend since 2009 from 10% to 57,2% in 2011 and then it started to contract to 44,2% in 2012. The sector is faced with liquidity challenges, antiquated equipment, power and water shortages that pose viability challenges.

Capacity Utilisation1

A local economist who declined to be named on professional grounds said although the Staff Monitored Programmes (an IMF programme that monitors the country’s economic reforms, policies and facilitate arrears clearance with official creditors) is an informal arrangement with the Brettonwoods institution aimed at tackling debt, the new finance minister should see through the programme to ensure re-engagement with multilateral lenders.

“It was not Biti’s programme, but was sanctioned by Cabinet. An informed legal person will tread carefully,” the economist said.
The economist said: “The budget that is due for November cannot change and promises for salary hikes for civil servants cannot be met as there is no money. The promises have to be postponed and he has to back off and become unpopular.”

He added that the Government of National Unity brought stability to the economy and recovered it from complete disaster between the 2000-2008 period.

51 COMMENTS

  1. Yeah, this is the best report i have ever read in this media and the ideas sujested are duposed to be followed by the said to be finance minister, its funy that we have useful brains out there, which are not put into good use ( posts ). I wish a Good economical future to Zimbabbwe, abide by the IMF regulations requirements.

  2. A very well written and thought provoking report. Yes Chinamasa has his work cut out for him. Will he be up to the task? Time will tell.

    • This is a very well presented report, I couldn’t say the same about the substance of it though. Time indeed will tell, I watched Mr. Chinamasa on BBC Hardtalk a few months ago and he did a good job of putting the condescending Mr. Sackur in his place. Anybody who can own a BBC Hardtalk presenter is good by me! On a serious note, I believe it is the government’s wish to be in good books with Western partners, these ministers of ours are not imbeciles at all as most think. This belief has cost the opposition much, in fact these men and women in government are quite sharp and surprisingly pleasant and charming once one gets to know them. If the West is willing to play ball and agree to doing business fairly we all can win; one thing is for sure, our government will not be bullied.

      • if only most people can see the way you just mention scotv then surely not so many people today would not be feeling so disappointed. if one takes time to listen to Chinamasa you will establish it as a fact that he really does have what it takes to make things happen. a month before election this guy was in Britain on invitation discussing issues of amending relations between our nations. look for a July IC publication magazine entitled Zimbabwe, special report. in this edition everyone was interviewed; the President. outgoing Prime minister, Prof Welshmen Ncube and Chinamasa it an awesome read.by the way Prof Ncube has it in him. its true our government can not be bullied. l believe we could be on the verge of rewriting history in terms of relations of the west and African countries.

      • That’s right, the leaders won’t allow themselves to be pushed around or taken advantage of – unless it is being done by Chinese and Russian communists.

        Seriously though, you are right

      • Wer were u 2000 to 2008,u hav forgotten that these same people made us to go tothe dump yards to look for soap!Q fo fuel potholed all our roads and plunged us into darkness no zesa arrested and beat us if u wer sent dollars rands frm diasopora brite my foot

  3. growing from a low base wil be easy, so i think the job is not has diifciult as one would think. since they are in control of the diamond revenue zanu pf can spring a few suprises and grow zimbabwe,

  4. if only they can stop the greed in themselves and for just one term they can realise that they are the servants and not our masters…..they created a bad business environment which is why the west do not want to do business with us. sanctions?…….far from it. its like Netone complaining to Potraz against clients who take their business to other networks and say those clients have put them UNDER sanctions…LOL. its bad economics and laws that drives them away. Be happy they still allowing us to us their currency, its a starting point.

  5. Hapana chinobuda apa guys. The truth is hapana mari and mapolicies akadhakwa so it doesn’t matter much kuti ndiani arpanyanga. Ndiye aiti Biti arikuramba nemari when the bottomline is that the money was/is just not there. Without the support of the IMF/World Bank and Western countries, we are doomed because we are heavily in debt while industrial activity is at its lowest ebb. MaChina akaomera aya. Even if the diamond money is channelled to Treasury, it won’t be enough to meet gvt expenditure. Where will they get the money to adequately cover the civil servants’ runaway wage bill, agriculture and parastatals? Tichakwata.

        • dont be silly. you cannot say to your neighbours family i want us to get along, help each other in tough times when either runs out of sugar, salt etc, visiting what what but your dad is not welcome. in fact, you should disown him and get him arrested for insisting that i cannot do as i please in your yard.

      • “Zimbabwe must just make progress. Sanctions, yes, we know they are there, but we must teach those sanctions people that no, Zimbabwe will never fall,” Mugabe said. “Yes, sanctions can be a predicament on us (but) we will find ways to make progress and we have other friends who really would want to work with us.”

        See, no need to worry about sangishenzi!

  6. Good article. He will soon realise economy can not be rigged. You eat what you kill. Also you need international friends to survive. You can not go alone in this global village. Soon he will become pu blic enemy number one.

  7. Lets hope these guys where stocking revenue or the said diamonds cause there is going to be a disaster.

    Lets also hope China will be able to carry us through these trying times.
    Good luck Chinamasa

  8. If this new gvt is pleased to have the greater part of the economy being informal, they should find a way to tax the informal sector so as to increase the tax base. Hope the Minister will welcome all progressive ideas from everyone…tombosiyanawo nezvepolitics, maybe positive results may come.

  9. From the time he started arguing about elections funding with Biti and eventually came up with stolen diamond moneys from nowhere, which rightly should have found their way to the treasury in the course of normal government business, it was clear gukurahundi Chinamasa was the parallel finance minister in the so-called inclusive government!!!!!!!!!

  10. fo the 1st time Newsday has written something helpful fo he build up of our beloved country…… keep it up……. asi MDC haichisina mari here fo yo funding of strories with a negative impact munyika mammunoraramira muchikuza the west…….shame on yu….. kana kuti motya Jonathan Moyo……

    • We want Zim dollar please Mr Chinamasa.Stabilise the economy and bring in Zim dollar. It can initially run parallel to USD AND RAND.

  11. shiri yagara hairegedzi muririre wayo,there is nothing positive coming frm these deadwood…nhunzi hadzigadzire huchi hazvifi zvakaitika

  12. All diamond money will never find its way to treasury. Remember there are also some parallel govenrment institutions including the police taking money from people and never finding its way to treasury. We want to see where Chinamasa will get the money to pay civil servants and give to agriculture and industry and commerce. This talk about resuscitating industry is a big joke without any commitment to providing resources. Forget about FDI because as we speak investors are busy deinvesting and others have already done so. The west has already tightened screws and inflows are starting to slow down and eventually create a serious liquidity crunch. Due to unemployment, many people are joining the informal sector everyday and this means loss of tax. The appointment of Jonathan Moyo as Information minister worsens the situation because of his use of hate language to the west. The rift will widen by the day and Zimbabwe is the biggest looser.

  13. This is one of the best article I have ever read, well rearched and full of information, insight and recomendations! weldone guys.
    @Scotv I think the only mistake you are making is that you are commenting on personality, howver the reporter is looking right at the challenge and the facts raised are true…your question above is foregone because the man in the job now is Chinamasa not Biti…I think that question was answered throughout the life of GNU!
    My Applied Economics tuitor Dr Roeloff Bortha of GIBS, South Africa once said it is easy to manage national economics-simply create jobs, and the govt will directly benefit from taxes on individual salaries, and the remaining portion will be spent on goods and servised (food, houses, cars etc) and the govt will benefit from indirect taxes-VAT, sales tax, Capita gains tax, excise duty – from companies. so the govt has benefited from thier own innitiative of creating employment! the govt income can be invested again to create more jobs and the cycle repeats itself in multiple numbers and govt income multiplies. by the third to fith round, the country has roads, hospitals, clean water, education, and all other govt expenditures! this means more income for the govt because they will charge taxes and fees for these services-tall gate fees, hosptal fees etc!
    but who creates the jobs to trigger this very positive chain reaction? its the customer who consumes the final product. the govt needs to promote consumption of goods and services in order to trigger demand for goods and services so that companies can start to produce because there is market for their products!- (Rcardo Machado-Marketing department- GIBS.SA).
    so yep, i thnk managing national economies should be easy job. then comes the problem of corruption and stealing. if the money is collected then used for personal benefit then we will not see all the development, a case for the past 33 years.
    So Mr Chinamasa, there you are. the choice is yours, every money the govt earns generates more income whether its just a dollar or 1 million dollars! if all the income earned finds its way back into the fiscus, then I this seemingly big mountain to climb will be a walk in the park!!!

  14. we wil support u sir dont be intimidated by these toothless dogs. If GOD is for us who can be aginst us. Mwari akamira nesu kuti tiwe nemaelections anerunyararo, ndiyezve achamira nesu kuti nyika yedu isimukire paupfumi. You are the right candidate for that post Honourable Minister dont be afraid you ll certainly do it!

  15. Dear Editor,

    I just finished reading the article Multimedia: Headache for Chinamasa as he takes over Zimbabwe’s hot seat” and l conclude that this is one of the few best well researched and unbiased and objective analysis of Zimbabwean news ever to be published in your news paper and l would therefore congratulate the authors and the editorial staff for a job well done.May you continue giving us this quality of news we are tired with opinionated and baseless reporting. I am really worried by the level of expertise behind some of the articles l read, [in Zimbabwean press in general including yours] l think its high time reporters become academics and good authors and be able to report and provide the public with news and insightful articles.

    Congrats once more…

  16. Chinamasa wakaisirwa kuti tisanetseka kutora mari yekutenga ma tractors mamwe edu ekutanga akafa. usateerera vanambwa ava iwe chako kutora ma orders kuna President RG Mugabe

    • @ Owen, tractors given by govt during the land reform are less than 12 years old, surely those tractors can still be serviced and still serve you for a couple more years.

  17. a better zim= you+ me- political differences. many pple are waiting for other pple to do the job or are waiting for those who are positioned in high places to fail then they start throwin stones at them. to build a better zim is our job as zimboz, civil servants shld be compensated for their patience. its high time the gvt shld act on their promises. politics aside national interest first…together we can build a better zim

  18. Wishful thinking. Too late in the day for Zanu to be any good for any economy. Who in this whole wide world trusts them?? And without the trust, who is going to do business with them. Chinamasa may mean well but so much odds against him. I wish him well, I have my doubts though… Time will tell.

  19. ask Simba who many thought was a fundi in this and he will tell you that water and oil cannot mix. when you try to do your work some imbecile throws a huge bobjan spanner in your works. nxaaa. corruption and dictatorship will make his job a daylight nightmare.

  20. A well presented article! Mr Minister approach the task with a radical paradigm shift, economic growth without FDI. Take a simple man in the street who takes home $250.Work with local authorities to afford that man a housing stand for a fraction of the said salary. Work with whoever partner to BOOT servicing of roads and sewer. The said man should built at least a standardized two roomed house especially with locally available materials. If the said man was spending $150 on rentals then expect an economic growth from the said man in a few months.

    For example, as a matter of policy the said man will be required to deposit $30 per month with a designated bank and we have 250 000 such man, we will have “several dollars” per month,multiply the number of months by “several dollars”, channel the “several dollars”,police fines, zinara monies,diamond monies plus taxes etc into the fiscus. Stamp unethical leakages such as corruption,stealing etc.Before 2018 the broader picture would be painted for everyone to see.

    But if you see things in the eye of a bookworm who drives a Discovery,lives in Borrowdale and plays golf on Wednesday you will never address the economy of a certificate,diploma,degree holder who is about thirty something who was only lucky to have a $250 job per month, moreso a pensioner who looks forward to a monthly income.

    Encourage domestic savings by addressing basic needs especially in the eyes of the man in the street.The man in the street is willing to save any amount in the bank in exchange of shelter and a peace of mind.Your usual corporates and the “wealthy” will at the blink of an eye remove all their savings in the bank and then what?

  21. If Jehovha does not build the house ,those who does the building ‘ll do it in vain & if Jehova does not watch over the city, those who watch ‘ll also wacth it in vain ,by the same talken if God does not build Zimbabwe with us ,&watch over it ;Zimbabweans ‘re wasting their time “Zimbabweans murikuita zvinhu zvenyu muchikanganwa Mwari ,nokuti hapana chamungaite kana JEHOVA asipo .Repent Zimbabwe,turn to GOD and remember ‘ur LORD . ” I , s’ll dwell among them and i s’ll be their GOD and they s’ll b my people ,thus says the Lord of HOSTS . STOP CORRUPTION ,DON’T B CORRUPT,F E A R “GOD” & U S’LL U LIVE .

  22. tutu whch sanctions ar u talkng about tsek .the analyst sando dzako hapana chinobuda apa kuda kutora kamukana kekaeconomy aka kambostada mbinjana very soon they wl ground it mirai muone gore haripere

  23. u knw what zimbos this is what pains me most if I start to analyse this so cold democracy if not democry by this zanu thing gono when he started his job was well peforming but later on eish anga amaone tomborasikira kuzifa white coaches nomally dismis themselves why railways irikutambura lobels maone NW MY POINT IS THAT YU MIGHT BE EXCELING OR FAIRLY GUD THERE IS ALWAYZ SOMEONE BEHIND TO TEL U DO THIS DONT DO THAT boys dzemasutu.Actually the pace is nw DICTATED fo u ask ana sabau vakazongonyarara vaimbova maspokes person. ainz pegel zviya he knew kubhora kut he wont get anywhr thats why he quit TO ALL ZHANU DIS IS WHY KEKUYU ACHINZ DICTATOR PLUS NEDICTATOR ZIVA MUNHU ONE NDIYE ANE IMPLEMENTED POLICY same police pamadiferent types of industries haifambe nyika kwaaa

  24. lets give him the chance under god’s guidance he will deliver.lets have a prayerful zimbabwe than to criticise each other daily.long live zimbabwe

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