ECONOMISTS have described the recent prophecy by Prophet Emmanuel Makandiwa that Zimbabwe’s economy was going to boom as “reassuring”, but said the country needed the right investor policies to influence economic growth and not miracles.
Speaking at the United Family International Church’s Judgment Night 2 event on Saturday, Makandiwa prophesied a major economic breakthrough for Zimbabwe.
He said Zimbabweans should start preparing for the good times where industry would produce at maximum capacity.
“Industries shall begin to run again. I see production. You shall remember these words,” said Makandiwa.
“You will be able to move around the city and be able to do your shopping even during the night.”
But Confederation of Zimbabwe Industries (CZI) president Charles Msipa said it was going to take more than prayer to revive the country’s comatose economy.
“Those are comforting words that show the desire by Zimbabweans to see industrial revival and I do believe there is hope for industry, but I also believe it will take more than prayer to revive our industry,” Msipa said.
He added: “There are no quick or miracle fixes to our economic situation and Prophet Makandiwa’s words are music to my ears and I believe if the private sector, public sector and policymakers were to take concerted action and collaborative measures to turn around the economy, problems bedevilling our industry will be resolved.”
Msipa said there was a lot of hard work that was needed to be done such as formulating the right policy environment, attracting capital inflows, as well as restoration of agricultural production which used to feed the manufacturing sector with inputs.
“We are de-industrialised because of obsolete plant and machinery, manufacturers lack access to affordable capital and funding and there is lack of finance due to low foreign direct investment since 2009 when we dollarised,” he said. “Infrastructural deficits and erratic power and water supplies have affected the cost of manufacturing operations.”
The CZI boss said if the country focused on ensuring that all those factors were improved, then the prophecy would come true.
MDC-T shadow minister for Industry and Commerce Tapiwa Mashakada said while he had no capacity to contest “divine” pronouncements, he believed that the country needed capital inflows, machinery and new technologies to resuscitate the economy. “There is need for protracted policy shifts to ensure industry starts to improve,” said Mashakada.
“We need to knock down industry into smaller units and merge the informal sector with bigger industries focused on consumer products, especially food manufacturing. Value addition of agro products will be a good start in view of competition from regional markets.”
He said access to lines of credit was also essential, as well as cutting down on huge labour, electricity and transport costs which resulted in the hike in prices of finished products. “We need a huge policy shift. President Robert Mugabe said there was need to attract investors, but as long as the indigenisation policy exists, there is a living elephant in the room. There are laws which need to be changed to attract investment,” he said.
Independent economist Eric Bloch said there was need to craft laws that promote foreign direct investment to ensure the resuscitation of the economy.
“Certainly prayer can help turn around industry, but we have to help it to help by ensuring that there is money to resuscitate industry,” said Bloch.
“The problem is that there is no money in Zimbabwe to fund industries and so we need foreign direct investment. The Ministry of Finance should look at tax legislation and create export incentives. Despite dealing with the monetary constraints, we have to also upgrade Zesa and make electricity supplies reliable so that industry can grow.”
Job Sikhala, who recently re-joined the MDC-T, said modern economies have never been run on the basis of prophecies, but on the platform of modern thoughts and ideas.
“The industry that needs modern technology and operations based on production and export of products in world markets does not need prophecies,” said Sikhala. “The economy operating in a corruption free-environment which promotes production against consumerism and plunder doesn’t need Makandiwa to prophesy its booming.”
According to a report on trade competitiveness by the Poverty Reduction and Economic Management Unit Africa Region (2014), the manufacturing sector in Zimbabwe had stagnated well before the crisis of the past decade.
“Its decline started in 1996. The main supply obstacles include lack of finance, obsolete machinery and equipment and the unavailability of inputs of production,” read the report. “The main impediments to increasing output are not lack of foreign demand or knowledge about foreign markets, but unavailability of inputs, obsolete machinery and poor electricity supply.”