Economist John Robertson is a hard man to please. Rarely do you see him agreeing with government policies, let alone its growth forecasts. While some would say he is a pessimist, some would say he just sees things differently. But as hard to please as he is, Robertson seems to have been charmed by the strides this economy has achieved in the last couple of months.
Robertson’s latest Economic Outlook Report for the First Quarter 2018, says the country is changing course and will soon be heading in a more promising direction. And he is even backing it up with the numbers.
While Finance and Economic Development Minister Patrick Chinamasa is predicting a 4,5 percent GDP growth rate in 2018, Robertson, through his research unit, Robertson Economics is predicting an even higher growth rate of 4,8 percent.
Over the years, Robertson has always been a rabid critic of government’s policies, but his tone has since changed as he believes the risks that were attached to the country have almost been eliminated.
“Well-supported claims can now be made that that Zimbabwe is changing course and the country will soon be heading in a more promising direction.
“While the damage endured by the economy over many years will take some time to repair and tangible momentum in the new direction has yet to be achieved, claims can also be made that the risks of further damage have been almost eliminated and some of the barriers that previously prevented progress have been removed,” Robertson noted.
The renowned economist believes the country’s zero tolerance on corruption will attract real investors as opposed to “opportunist” that it has been getting in the name of investors.
Said Robertson: “With toleration of corruption now greatly reduced and officials setting a deadline for the return of money illegally banked abroad, genuine investors are now more likely to displace opportunists who exploited Zimbabwe’s weakened defenses to drain the country of hard currency.”
Zimbabwe has seen capital flight over the years with some international companies closing shop whilst some delayed expansion projects. Robertson, however hopes that latest developments will lead to a change in fortune resulting in the much needed foreign direct investment coming into the country, a trend has already been witnessed in the last two months.
“Hopefully, improving prospects will boost confidence enough to reverse the direction of the capital outflows of recent years.”
In its efforts to attract foreign direct investment, the country through the Office of the President and Cabinet embarked on the Rapid Results Initiative (RRI) to improve the ease of doing business. Major strides have already been made and some areas have significantly improved.
Robertson however, recommends that more still needs to be done to improve the ease of doing business.
Attacking the long list of business licences, approvals and permits would be a start, said Robertson.
“For most of these, the fees collected do no more than pay the salaries of the individuals empowered to collect them. The amounts collected are therefore a hidden tax from which no benefits are derived, but they are high enough to add to local costs and to make imported goods prices more competitive.”
He said the opening of new businesses and actual job generation numbers will be the principal measure of the success of the new leadership.
“Job creation comes about as a direct result of investment and however much the mood has improved, it will not translate into investment decisions while unnecessary policies and practices continue to undermine every investor’s prospects of making a profit at reasonable, competitive prices.”
As part of policy reforms, the Government has refined 99-year leases, a move that is set to return land to the market. This another area Robertson believes will revive the country’s economy which is largely predicated on agriculture.
“Putting the land back onto the market would be not only the best way to start a recovery, but also an essential step towards that recovery.
“If Zimbabwe chooses not to take that step, the recovery will be much slower and much more painful.
“Taking the land back to the market would turn the land into capital, unlock farmers’ access to finance and would allow the recovery we all need to start in earnest.”