eBusiness Weekly
Tinashe Nyamunda
The Fiscal and Monetary Policy Reviews presented in the last two weeks, while an important aspect of the media calendar, was just business as usual for many ordinary Zimbabweans, at least the ones that I spoke to. In this column, I too discussed what I thought both policy statements revealed about Zimbabwe’s economy in the last fiscal year and its immediate future prospects.
I tried to understand for myself, and discuss the issues discussed in a way I thought would be most accessible to the readers.
And I was very fortunate to get some wonderful feedback on my assessment of the policy statements. So this week, I will use this critical feedback to reflect on how the technical policy issues presented by the Minister of Finance, Patrick Chinamasa and the governor of the Reserve Bank of Zimbabwe, John Mangudya were received by the people who read my column and provided valuable feedback.
The point repeatedly made to me was that the problem with the Zimbabwean economy is not what the well-meaning minister of finance or governor of the Reserve Bank of Zimbabwe do.
In different contexts, some of their policies, with adjustments, would probably be sufficient. So the economy in itself is not a problem, but the politics that inform the context in which it functions is.
To be clear, this newspaper focuses primarily on business and economic news and, as the editorial policy, should not meddle into politics. But then if the State is serious about informing its people about the state of the economy, its problems and how best to resolve it, then it must allow a certain amount of flexibility in discussing how politics affects the economy. After all, the economy is the most potent political issue in any country.
But of course, it depends on how the politics is handled and the extent to which politicians are concerned about the welfare of people.
One of the comments I received emphasised the point that in the case of Zimbabwe, Minister Chinamasa and governor Mangudya are trying to use policy tools to make the best of a bad situation.
The critical problem is one of confidence in the country. I have written before that the structure of the economy is not in the best shape to facilitate any positive or sustained development.
Part of the problem can be attributed to the state of capture of critical resources and areas of the economy whereby a few individuals benefit at the expense of the economy. I have mentioned diamonds, gold and platinum before, and I hope at some point to dedicate a few columns to examining this in future.
For now, take the example of how the fuel industry in Zimbabwe is managed. The petrol imported into Zimbabwe is blended with ethanol at Billy Rautenbach’s Green Fuel Investments, ostensibly to save the country up to $2 million in its import bill monthly. But the regulation to blend this fuel at once created a huge business opportunity for Rautenbach.
Moreover, many are worried that in spite of limited attention to such powerful individuals, they may well allegedly be conduits for illicit financial outflows also. I do not need to get into the narrative, which many journalists have covered but interested individuals can look up Rautenbach’s activities online.
His ethanol blended fuel, in spite of it being of the poorest quality, is the still the most expensive in the region. But the politically connected owner of the plant is making a killing, on top of all of his other huge interests in transport, mining and land.
In spite of some of the rhetoric of land reform, of the biggest land-owners in Zimbabwe happens to be a white Briton, Nicholas van Hoogstraten.
Race is not the issue for me here but I couldn’t help notice the irony. To maintain his business activities, the businessman established political contacts at very high levels.
These “investors”, and there are more examples of this, have been viewed to be of questionable character in many media circles. Their activities dent the general populace’s confidence in the capacity to improve the economy of Zimbabwe. Van Hoogstraten and Rautenbach’s alleged activities are viewed as predatory and not in line with the country’s developmental interests.
Then there is the scourge of corruption that is part of every facet of everyday life. Take the example of the senator who challenged Vice President Mphoko and Minister Kasukuwere when he asked them why councillors “leave with nothing” at the end of tenure in office.
Politics should be a voluntary public service not a key to wealth creation or accumulation. But because it is viewed as the best key to access land for stands, tenders and other benefits, politics in Zimbabwe has been corrupted by the allure of financial gain at every level.
Take the examples of all the tender scandals involving Wicknel Chivayo at the Zimbabwe Electricity Transmission and Distribution Company (ZETDC), where the responsible minister justified his dealings by threatening to expose other parastatals’ underhanded activities.
Yet the Government expects the populace to have confidence in such badly run parastatals that have turned into powerful ministers’ piggy banks at no consequence. This is just the tip of the iceberg. This explains why police corruption on the roads is a mere symptom to a much bigger problem. The ethos that is now rooted in the country is that “Mbudzi inodya payakasungirirwa”. It has become about personal aggrandisement rather than public service.
In any economy where politics allows one access to loot, the opportunity to develop the economy for the fair distribution of wealth, to uplift every citizen’s welfare is lost.
Politicians who have captured the State shift policies for only their primary benefit. Added to certain political rhetoric designed in some quotas to access certain investments also destroys potential foreign investor confidence.
It gives the people the impression that Zimbabwe is for the politically connected and those who have access to extract from it.
The above reflects some of the feedback received from readers who read my pieces. I felt it prudent, as a reminder to politicians of all persuasions, to tell the unvarnished truth to power.
Ultimately, the point of the feedback from readers is that the details of monetary and economic policy are less influential in the Zimbabwean context than the realities which shape local and foreign confidence in the country’s economy and its management.
Feedback email [email protected] , twitter handle @nyamundat
