Zimbabwe needs real money not small money-Chinamasa

ZIMBABWE requires “real money, not small money” to grow the economy in the short to medium term as business activity slows down, Finance minister Patrick Chinamasa has said.

Victoria Mtomba

Speaking at the AMH Conversations held in Harare, Chinamasa said when he was appointed Finance minister, his appointment was received with mixed feelings from his friends and enemies with the latter hoping that he would fail.

AMH conversations are dialogue sessions held by Alpha Media Holdings — publishers of NewsDay,Zimbabwe Independent, The Standard, The Southern Eye and Southern Eye on Sunday — on various topical issues. The dialogue was held under the theme Unlocking value-Getting Zimbabwe to work.

Former Finance minister Tendai Biti once said the country required a stimulus package of $4 billion.

“To get out of this situation we need real money not pennies. People are coming with $20 million, $25 million, that is not enough. We need real money that should not come at commercial rates, but concessional rates. I need a period of grace to do the sort of things that I have to do,” Chinamasa said.

“My enemies were jubilant at my appointment as the Finance minister, they anticipated a waterloo, a failure. That reflects the challenges our economy is facing.”
Already, industry capacity utilisation has declined to 39% from 44% last year due to a host of problems besetting the economy. The mining sector, now the mainstay, also requires at $5 billion.

According to a report seen by this paper, the Chamber of Mines of Zimbabwe said more investment was needed in the platinum mining sector to outpace Russia as the world’s second-biggest producer of the white metal.

Zimbabwe currently has the second known largest platinum reserves after South Africa. Experts say underfunding and limited exploration have over the years stifled growth of the mining sector, now the mainstay of the economy. Mining contribution to GDP has grown from an average of 10,2% in the 1990s to an average of 16,9% from 2009–2011.

Reeling with a huge import bill and unsustainable trade deficit, analysts say government should review the indigenisation and empowerment regulations which compel foreign-owned companies to sell controlling stakes to locals.

His remarks came a few weeks after the ruling Zanu PF party endorsed an economic blueprint to guide government in the short-to-medium term.

The Finance minister said the country was facing a huge power deficit with a total of between 1 100 megawatts and 1 200 megawatts being produced compared to 2 500 megawatts due to depressed demand because of various challenges in the economy.

Chinamasa said the country could not move forward until the issue of power was addressed. He said for the past 20 years, infrastructure has not been attended to and the agricultural sector has not been fully funded. Official figures showed that Zimbabwe required at least $6 billion for power projects.

“Human capital in this country is not being replaced because of the social infrastructure, education and health no investments has been done in the past 20 years,” he said.

Chinamasa said the country was still facing realities of sanctions and debt from multilateral institutions and the country was in the process of verifying the debt figures. Zimbabwe, which agreed to the International Monetary Fund Staff-Monitored Programme was saddled with a $10,7 billion external debt.

“We think we will be able to get to the figures, and we will announce that this is our formal debt,” he said.

Chinamasa said the debts were in four parts that included African Development Bank, World Bank, International Monetary Fund, bilateral individual countries, European and Western countries under the Paris Club, Chinese and other small debts scattered all over the show.

Chinamasa said there was need for the creation of a conducive environment in word and speech so that the country could move forward.

The Finance minister said there was need to deal with the issue of perceived country risk as it was the major reason why the country was failing to attract cheap money. He said for instance, when one borrowed directly from European banks the libel rate was 0,2%, but when Zimbabwe borrow that cheap money they would add 7% country risk to Zimbabwe and banks would also add their own margin that would result with the figure coming to 12-15%.

“It’s 12% or 15% on United States Dollars, one cannot make viable business unless you are a trader. You cannot make money with 12%, 15% or 17% interest. Country risk has to be addressed and is determined by what we say about ourselves to other people,” he said.

Commenting on the recently adopted economic blueprint Chinamasa said the Zimbabwe Agenda for Sustainable Socio- Economic Transformation (Zim Asset) will focus on water and energy as they were the most important things in the economy.

“The power deficit is huge, we need to close that gap and on water we need to have running water. It’s something that we are talking about,” he said.

According to national statistics, the country recorded Gross Domestic Product growth between 2009 to 2013 of 10,6%. The country managed to achieve the growth through various measures such as the introduction of multi-currencies as well as the taming of inflation under 5% from the highs of 231 million in 2008.

New border control Bill on cards

GOVERNMENT is crafting a Border Post Authority Bill to ease congestion at the country’s ports of entry amid concerns that Treasury could be losing millions to corruption at the border posts.

Speaking at a dialogue session organised by Alpha Media Holdings, AMH Conversations, Transport and Infrastructural Development minister Obert Mpofu said the ministry has received numerous complaints regarding congestion at the ports of entry and exit.

The meeting was attended by Media, Information and Broadcasting Services Minister Jonathan Moyo and his deputy Supa Mandiwanzira, Finance minister Patrick Chinamasa, Minister of Agriculture, Mechanisation and irrigation Joseph Made, ambassadors and several stakeholders in the country. Zimbabwe is one of the lowly ranked countries on the World of Doing Business Report.

Players say travellers and haulage trucks spend more than three hours to get clearances at the port of entry prejudicing Treasury of revenue as some resorted to corrupt activities to facilitate processing of documents. “We are currently working around the clock to bring normalcy and reduce the waiting time at the borders. The Border Posts Authority Bill, currently in its formative stage, is envisaged to deal with this challenge permanently,” Mpofu said.

Observers said it took more than three hours to get cleared at the Beitbridge Border Post while it took eight hours or days for truck drivers to be cleared at Chirundu Border Post.

He said the ministry required significant funding, but was unable to raise more funding as the Central Vehicle Registry was still using a manual system that has made it difficult to fully value vehicles as more vehicles were unregistered and not paying licence fees.

Mpofu said the rehabilitation of the Plumtree-to-Mutare trunk road network was ongoing, adding that expressions of interest for public works along the Beitbridge-Chirundu road, Harare-Nyamapanda and Karoi-Binga roads were being looked at.

“More than 15 road construction and rehabilitation projects will, in the next few weeks, be presented for bidding, “he said

Mpofu castigated the contracts that have been made on the dualisation of roads infrastructure in the country saying they were skewed in favour of the contractors.
“When you look at the contracts they leave a lot to be desired, it’s a contract that has someone who knows that you are in a desperate situation. We have a problem with local business as they are the ones with some of these shortcomings, look at the Harare-Norton road,” he said.

Opening the Eighth Parliament in September, President Robert Mugabe said the new Bill would facilitate the efficient movement of all forms of traffic at the country’s border posts.

Turning to the country’s rail infrastructure, Mpofu said a railways recapitalisation programme was being implemented to restore the National Railways of Zimbabwe’s capacity as a cost effective and efficient bulk carrier.

“It is estimated that NRZ requires about $260 million in the short-to-medium term and we are currently in negotiation with possible financiers to agree on the funding model to be adopted,” he said.

35 Comments

  1. Smoke and mirrors again. Verify your debt? Really! Okwe Zanu ngokunye.

  2. Musoro wenyaya inotaura zvaChinamasa weTrillion budget moisa chinepi chaObert Mangoda Mpofu sei apa murikuedza nyiyi apa Newsday

  3. can’t they nikuv the economy also?

  4. can’t they nikuv the economy also?better than sa

  5. haaahhh !
    saka china uri kutiyiko ?

  6. be innovative

  7. The ministers have cash they can raise real money.

  8. i think cde chinamasa now sees the light that you cant ignore the realities of this economy, that zimbabwe is not a bankable economy because of the mere fact that the administration lacks integrity and their word has no value.i think these are the very first steps to becoming a successful minister.its not about bringing the economy to a supersonic growth but bringing confidence in the market.but mugabe will be a stumbling block in your drive to bring confidence in the economy as he as refused to acknowledge the fundamentals of running an economy.but honourable chinamasa do you remember muchiti biti is an failure,why is he not giving farmers and industry funding.maiti inobvepi.so far keep it up

    1. thanx fact, those are facts!

  9. lets face it cde chinamasa, biti was right and at present he is the best man for the job you are now holding. real money is with the zanu pf thieves cde. tell them in their faces that they should surrender what they stole or else you will fail and your enemies will continue celebrating your failures. you dont have an easy job cde because of the people around you and all that your party did in the past 33 years.

  10. muchawacha madchalo. pamberi neZANU PF

  11. Biti akataura kangani nyaya iyi yamurikutaura iyi and all ZPF people (members and fanatics) said he is colonially enslaved. Now I am sure that since it is coming from a revolutionary it becomes the gospel truth. 5 years ago when Biti said these same issues, if we had listened to him we will have gained 5 years. Probably by now the confidence would have been at a better level. Now we have to start from fresh just because Biti was MDC.

  12. Zim needs God’s intervention and God will provide with all.

  13. $550 000 worth of diamonds stolen, how about the unstolen ones. come on cde get your calculator and put on your Ted llapidus suit and start doing work .chooow

  14. our faithful God gave us mangoda to mangoda our economy so why cry, speak.

  15. Cde Chinamasa just look @ the Mbada guys who stays @ our neighbour hood, vanogara mumapako sembada, vakapfeka sembada, vachifamba sembada, vachidya sembada. $10,7billion hapana mari zvinogoneka cde.

  16. Zanu and its people are very good at making sloogans its not the same as running the economy.Too much of sloogans blind vission.We want action after talk.

  17. No uncle Pat, Zimbabwe does not need real money. What Zimbabwe needs right now is honesty integrity and responsibility from everyone especially those in power. With the current environment even if you got a trillion dollars you wouldn’t achieve anything.It will all be stolen.

  18. Mr Chinamasa in your manifesto you said that you were going to unlock trillions of dollars from various resources our country have and pump it into the economy. So why on earth do you want someone to come and give Zimbabwe the real money you are talking about. Fulfill what you promised in the manifesto. What I know is that no matter how I don’t like the MDC, they would have been capable of sourcing billions of dollars within a day of their win. You have been failing to do that for the past 2 decades and what makes you think you will do it now?

  19. Those proposing majority control with 51% equity must contribute the money.Do not expect minority shareholders to do that for the indigenous.That is what foreign direct investment is all about.

  20. Patrick is a pretender and a joke. The guy is not his own man. He is fake. Real money from where? The west? You now want money from the west? Was it not your party the was running govenrment all these years? Please stop this clownish behaviour? Ari kupi maWar vet ano demostrator kuoffice kwake zvavaiita kuna Biti? We are not fools Patrick one day you will test your own medicine.

  21. kana vana chunkie charlie were more convincing comics than this bunch.

    1. @kabati- now hold on a second..chunky charlie??? This is a South African comic strip comic strip from the 70s with She, Parade Foto action, Kid Colt, Beau the untamed, Lone Wolf, Saboteur” and so on..are you suggesting these guys were all reincarnated and now form the current cabinet..if this were the case more pop corn then! You sir are a genius! This is hilarious!

  22. thanx cde yu said it corectly,we must change our talk kkkk yu ar good @ scolding but yu don’t hv solutions,yu agree that for the past 20yrs yu failed hahahaha to those who voted yu back,tough luck my man

  23. Zimbabwe needs democracy. It needs free and fair elections. Any money that is brought in will be shared among the Zanu thieves.

  24. Hanzi nabharanzi minister uyu hakuna demand ye magetsi. Zvakamboitika kupi ikoko. ZESA ndiyo isina generating capacity chete. Let them generate vaone kuti hatimabhadhare here magetsi acho.

  25. Magetsi acho arikuendepi iwo ma Industries akawanda akavhara?.

  26. Presenting the budget in quintillions and gazillions, I felt sorry for the poor fellow..it was like he was saying, please will someone put me out of this misery..Now five years down the line an echo of the same cry seems to be getting louder and can presently be heard as far as Mount Kilimanjaro..Zimbabweans are usually not this heartless and they will certainly oblige you getting you fired from the post..just give it your best to invite this and the train with the red letter firing you will also gather speed..take heart this will be soon!

  27. “there is need for a conducive environment in both word and speech for the economy to move forward. “says the Minister of Finance.

  28. Above all, you are a lawyer. what are you doing in the ministry of mines ? you are more at home in the justice ministry.

  29. Biti Ws right no investment unless yu abandon populist policies. Mari inoperera kuma small houses.

  30. Now chickens coming home to roost. MaZhinzhong aripi to bail Yu out

  31. Prudence is required unfortunately zpf has none. Already Yu have ordered new cars for ministers, why why why, shame shame shame.

  32. Ipai obert minisrty ndiye ane mari yese yemangoda

  33. This economy needs serious foreign investment but this can come if u guys swallow yo PRIDE n make diliberate policy to revise indigeneous policies for a certain period in favour of foreign investors .yes economic blueprints are fine they guide n give directions to an economy bt as long they are not financied they soon become dusty books in an OLD library

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