Reforms may cause suffering: Mutizwa

BUSINESS has urged government to take a cautious approach to the reform process, warning that a big-bang approach may result in unintended consequences and plunge the country into further crises.

BY Kuda Chideme

Coming from the brink, the authorities in Harare have an ambitious reform plan to revive the country’s sluggish economy, restore order to public finances after years of fiscal slippage and address chronic external imbalances that have left Zimbabwe with extreme foreign currency shortages.

Appearing before the United States Foreign Relations Sub-Committee on Africa and Global Health Policy, chairperson of the Zimbabwe Stock Exchange (ZSE), Joe Mutizwa, said though tough economic reforms are unavoidable and long overdue, their impact would cause significant pain on the intended beneficiaries.

He said there was every possibility that in the short term that disposable incomes will drop, causing liquidity to tighten and result in company closures as the reforms begin to bite.

“As Zimbabwe’s private sector, we are fully supportive of the reform programmes embarked upon by our government. We want to see more action and less rhetoric, and better co-ordination and sequencing. We will give our government support in the form of advice and constructive criticism as well as through playing our part in raising production and exports, conserving foreign currency through import substitution and improving competitiveness through cost efficiencies and value addition,” Mutizwa said.

“The observation of the private sector is that because of the above risks, the proper sequencing and pacing of the reform programme becomes crucial. A ‘big bang’ approach to economic reforms may have dire unintended consequences given the fragility of the economy. In the absence of significant international financial support, a gradual and nuanced reform process may be more appropriate”.

Mutizwa also told the committee that sanctions remained a constraint on the country’s economy and called for their removal.

“Our view as the private sector is that Zimbabwe’s government desires to strengthen its relationship with its traditional business partners which include the USA and EU (European Union). Zimbabwe has already applied to re-join the Commonwealth – a strong indicator that it wants to improve relations with the United Kingdom-led grouping and with the West in general. Sanctions present a formidable obstacle blocking the way to the resumption of these partnerships.”

Zimbabwe has been under US sanctions since the turn of the millennium after former President Robert Mugabe’s government embarked on a chaotic land reform programme, which saw white farmers being kicked off their farms.

As a result, the country has not been able to access external lines of credit, and it is estimated that Zimbabwe banks have lost more than 100 corresponding banking relationships in the process. US President Donald Trump extended sanctions against Zimbabwe in August, indicating that the US would evaluate its foreign policy on the country after elections, but the killing of six civilians in post-election clashes between demonstrators and security forces dampened hopes of having the sanctions removed.


In September, Manisha Singh, the US Assistant Secretary of State for Economic and Business Affairs, told a House of Representatives hearing that the US government would not lift sanctions against Zimbabwe until the new government of President Emmerson Mnangagwa demonstrates that it is “changing its ways”.

Currently, there are 141 entities and individuals in Zimbabwe, including Mnangagwa and Mugabe, that are under US sanctions. The EU lifted most of its sanctions in 2014, but has maintained those against Mugabe and his wife Grace.

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5 Comments

  1. ZIDERA has some requirements that are very easy to meet if implemented.
    Aligning laws of Zimbabwe to its latest constitution (including fair access to all media/state entities for all political parties).
    Implementing rule of law without being selective and g.
    Tackling corruption regardless of the status of the accused.
    Compensating those dispossessed of farms and guaranteeing property rights.
    Ensuring ownership rights are respected.
    The only requirement that requires financing is compensation of farmers who were forcibly removed from their farms. This is a self-inflicted wound that requires a complete shift in mindset from warrior mode to business mode.
    A serious government can tackle ALL the ZIDERA requirements in 6 months – is the current govt up to the task? I don’t think so. ZIDERA lays out the business rules of engagement with USA IMHO, distasteful as it might be.

  2. shunguhadziurayi mangarayi

    The silly demonstrations on 01 August were well timed and planned to have that outcome of deaths by the mdca so as to have the sanctions maintained which will result on the suffering of the people then chanyiswa will call for more demonstrations hoping to enter into a gnu through back door. Surprisingly you hear a seemingly normal person refusing that there are no sanctions, they are targeted to ZANU PF leadership. But there it is correctly spelt out that 141 entities are under zidera sanctions. mdca are real satanists who survive on the suffering of this nation. surprisingly some people supports these satanists as if they leave somewhere. This chimdc party has brought untold suffering to this nation. Since its formation this country has never been the same. But God shall rule over satanism being practised disguising with his name

    1. 1)the question you should deal with is – are demonstrations in Zimbabwe illegal?. Is the Army mandated to kill its citizens?. Why did the ZNA kill the people it should defend?. Are opposition parties forbidden in Zimbabwe?. What type of democracy do you subscribe to?. ED and Chiwenga should not be criticised if they go wrong?. Satanists?. i hope you know what you are talking about?. Your comment is just misplaced and lacks relevance. Zanu PF is full of Satanists more than opposition parties. Guided democracy is for people like you who are mere puppets of Zanu PF.

      1. i do not know were you are collecting all this litany of lies from i hope you are living in zimbabwe as some of your allegations are totally misplaced and out of touch with reality situation in zimbabawe

  3. The unfortunate part is that the reforms, if any, being taken by the current government do not benefit the ordinary person in the street.
    They make sure they benefit themselves first. How do they come up with fuel policy when some of them are fuel dealers and some legislators.

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