HARARE - Statements this week by Finance minister Patrick Chinamasa that Zimbabwe is far from reaching the prescribed International Monetary Fund (IMF) Staff-Monitored Programme targets, makes sad reading.
This coming after the country had requested a further six-month extension to the programme, which should have ended in December last year, shows that the Zanu PF-led government is not serious about growing the economy.
Chinamasa gave flimsy excuses that IMF prescriptions on the reduction of government’s astronomical wage bill, strengthening the financial services sector, and bringing transparency in the diamond sector required a lot of time.
We thought it would have been apparent to anyone with a sensible mind, that there is no way the economy will grow as long as government’s expenditure is not contained. Currently, government’s wage bill is consuming over 70 percent of Treasury’s budget and this is not sustainable anywhere in the world.
Most economic experts and think-tanks have already warned that Zimbabwe’s economic outlook this year remained highly uncertain as a controversial black economic empowerment law scares away investors.
We are of the opinion that a bloated civil service wage bill is crowding out growth-oriented expenditure and worsening the country’s growth prospects for 2014.
If companies are retrenching under the current harsh economic environment, it is also prudent for government to reduce its work force as a way of enhancing efficiency and reducing redundancy.
Instead of fearing drastic measures that can help turn around the waning fortunes of this economy, Chinamasa must come up with strong policies that encourage growth and investment in the country.
If Zimbabwe fails, which is the likely scenario, to meet the targets set by the IMF, then it would be difficult for the country to negotiate with the Bretton-Woods institution to help it clear $10 billion in external debts and give it access to new credit from international lenders.
As it stands, no sane investor would be willing to pour money into an economy where the political risk is very high and where you are requested to cede more than 50 percent of your shareholding to locals.
We have said it before, and we will say it again, the Indigenisation Act must either be revised or completely erased from our statutes.
This law is not helping the economy as evidenced by massive investor flight both from the Zimbabwe Stock Exchange as well as from local companies.
It’s high time that government prioritises the social and economic well-being of its citizens over its own selfish needs.