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Emmerson Mnangagwa has to suffer more

Opinion & Analysis
He says he is not gunning for a third term which signals him racing against time. 

President Emmerson Mnangagwa has to suffer a lot more if he is to leave some legacy of the time he was the leader of the country. 

He says he is not gunning for a third term which signals him racing against time. 

He has to make big, audacious and hairy decisions to create something to marvel about in his political retirement. We the people may not remember him without big, temporarily unpopular and tough decisions.

It’s a tough one for him as those tough and extra ordinarydecisions will make the country a success, after decades of economic quagmire. These decisions may cause immense pain to the people he led. Unfortunately, Zimbabwe can’t get out of its myriad challenges without absorbing some pain.

The topical issue on the Zimbabwe Gold (ZiG) is a terribly tough terrain for him. He may have to suffer. 

He must either have a strategy to increase gold output or increase royalties on mining output. Options include resuscitating State control of some mining companies  like the old and functional Zimbabwe Mining Development Corporation and or change the mining model like Botswana that now require 40% of output. Without that the currency will have no leg to stand on.

The tough decision on mining will be unpopular with his stakeholders and a big gamble. The miners will be extremely averse to fellow countrymen sharing their wealth. Some of the miners are his friends. He may have to suffer that or he will be quickly forgotten by economic history.

He has another tough and unpopular tax reform to deal with. He is running an economy in which the tax burden is on the shoulders of the unfortunate 20% or so of people who decide to be compliant. Crony capitalists, households and some business do not care or desire to finance the government they demand so much from. They don’t pay anything or much to the fiscus.

We are a country with eighty percent plus businesses that are informal, households are business unit that don’t pay tax, eightyplus percent income earners are not tax registered, majority are not banked, mining and agriculture pay the least tax, most have not access to credit, significant purchases have no murky sources of income and the biggest of them all is that most adults are unemployed.

To make the country a success, ED may have to formalise the economy, spread the tax burden, ensure agriculture and mining a biggest contributor, whip banks to pursue financial inclusion and most important move to household-based tax collection system.

Great moves those will be but the pain will make him unpopular with every sector. We often prefer an accountable government without accountable citizens. He may suffer because for nearly three decades we enjoy income without formalisation and taxation.

ED’s government is planning our third world economy using a first word template. National security, national health fund, national aids council, Zimbabwe development fund and so forth are completely useless. It’s all innovating around the familiar.

All these national interventions are to be funded by employee tax. People aren’t working and its doubtful 15% of the formally employed people can carry fifteen million people. He may have to decide to fund these interventions using some consumptive tax that capture all citizens so that everyone is in the net to fund social interventions.

Unfortunately for him people already have the idea that government must be funded from miracle money. Soon he decides to put everyone in the net to fund government he will achieve a lot and lose popularity. It’s probable he doesn’t need popularity anymore and concentrate on doing the logical thing. He has legacy to create accountable citizens.

As a people we need a hug. We inherited a country in which state enterprises contributed 40% of the GDP. All these are nowinsolvent and dysfunctional. ED has to suffer causing a big metamorphosis in corporate governance systems. 

He has to adopt a comply or else approach like the USA Sarbanes Oxley Act. A voluntary corporate governance approach has failed us.

He will have to suffer as most of the directors and leaders are part of his network. It won’t be easy yet it’s the right thing to do. This Mutapa Investment Fund has a very dangerous terrain to navigate yet commercial outcomes in business must be a bigger consideration to political outcomes.

We are in a fix as a country. For decades since 1980 we pursued a socialist agenda in which we subsidized everything and anything. It’s the shortages of electricity, water, roads, transport, hospital equipment and so forth we face now as the historic relic of socialism. We are not going to get out of it without pain.

Removing subsidies and increasing industry and household costs will make him very unpopular. It will be a pain but this hole we keep digging will be a big dent on his legacy. It’s unfortunate that sins of the predecessors visit the incumbent. The rot is on his head now and no one else.

The news in the streets is that the country is riddled, closely controlled and captured by crony capitalist. The pain will be heavy for him discard these. Unfortunately, the post-ED era will need less entanglement of cronies. Its better now than when he has no control of country outcomes.

In it all, ED needs a hug as he has to suffer. If he is to choose an easy path,he will leave the throne without anything for the country and himself to reminisce about.

  • Brian Sedze is a director at Free Enterprise Initiative. He is also a strategy, innovation and compliance consultant. He can be contacted on [email protected]

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