By Bernard
Bwoni
Zimbabwe’s economy is going to bounce back and bounce back big that is. There is work to be done but this growth will happen. It is low productivity, low output and high unemployment that are the economy’s major drawbacks and for the economy to rebound, these are the main areas that will require urgent attention. The difference between output and employment is labour productivity. In Zimbabwe, over the past 15 years, labour productivity growth has grounded to zero. The key to addressing this productivity problem is to bring real wages to move with labour productivity. The country has everything in place and just requires an urgent injection of money into the economy. Investment, domestic or external, is key as it brings in this funding, funding is important in increasing productivity and companies are likely to expand with financing and investment. Money respects money, even so in a bad economy. The investors are coming to Zimbabwe and that is an unavoidable reality. The key is to retain them, to mollycoddle them if we have to and allay any misconceptions they have about the country’s investment laws.
The Zimbabwe economic crisis was created (again I am not writing the article to apportion any blame) but there is a real danger that the power those that created the crisis has over the country may mean the ground lost over the last 15 years may prove a big challenge to tackle. As a country there is need to understand each and every stage of our economic recovery, understand that things have changed and conditions are different compared to the pre-2000 period. There is no point in believing that things are not so bad and that some knight in shining amour is going to come from some far off lands to save us. As a people we have to free ourselves from that apathetic and defeatist attitude where we are busy convincing ourselves that there is nothing that can be done about our current economic predicament. We have to embrace the severity of the economic situation, do away with some old actions that will not work in the current climate.
There is need to prioritise new skills, new abilities, new personnel and new actions in order to move forward. This is what is going to breathe new life into the economy and then and lead to the reinvention and reinvigoration of this economy. It is about taking new actions and getting new results. If old actions are resulting in old outcomes then the idea is to replace them with new ones. These new actions, new skills and new approaches have to start from the top and cascaded downwards. The top has to sell the idea, make the bottom believe and subscribe to that idea of a home grown economic recovery. At the moment there is too much energy being wasted on who is to blame and little being used to find practical ways to produce our way out of the current malaise. It is about correctly estimating the changes, challenges and efforts required to get the economy moving forward again. Our concern as a country should no longer be about who is to blame but rather what needs to be done. The hard reality is that no one is going to bail us out. It is going to require the collective strength of the Zimbabwe people, the collective effort, creativity and persistence to get the country’s economic wheels turning again. It is about developing new skills for we are confronted with a new economy and these are unchartered waters calling for new set of skills. The old skills that aided Zimbabwe’s pre-2000 economy will fall short going forwards with advent and emergence of this new economy. The risks to the country’s economy are multifold, they remain ever present and focus should be primarily on jobs creation and getting the economy growing again. Last year our economy grew at a very slow pace and that is the first major challenge to address, get the economy growing again. At the moment the economy is not growing, and no amount of speculation, economic theories and models are not going to get the economy growing. See how the statement ‘get the economy growing again’ was repeated? That is because there is no economic recovery that is going to happen with an economy that is not growing.
Those entrusted into positions of policy making have to realize that constant interference in the economy does more harm than good. The sky is the limit to the harm that they can do to the economy in their efforts and genuine hope that they are doing something for the economy. The Zimbabwe economy is in recovery, the endless poking and intervention by the powers that be has only helped slow down growth. The economy needs to heal before we can open the wounds again and perform more economic surgery. The current high unemployment (formal) is not sustainable. There is a real urgent need to keenly focus on what can be done by government to help the economy recover and at the same time recognize the limitations of some policy initiatives. The tone from government is pointing to such. The fact that a policy has limitations does not in any way imply that it is a flawed policy, but rather a challenge that can be addressed. The government of Zimbabwe has been receptive and responsive to all these and the actions they are taking today are the reasons why this economy is poised to be second only to South Africa in the next two years. I state this with confidence and certainty.
Earlier this
year I predicted that Zimbabwe was destined to be Sub-Saharan Africa’s second
biggest economy after South Africa in the next three years. I was wrong, my
apologies and I am going to revise that and categorically state with absolute
certainty that in the next two years Zimbabwe is in fact going to be
Sub-Saharan Africa’s second largest economy after South Africa. Yes, within the
next two years and not three. In this article I am not going to focus on why
the country’s economy hit rock bottom, but rather what has happened over the
past 15 years and the implications this will have on the type of economic recovery
the country is going to experience to land that second spot of economic
dominance this side of the continent.
The first step
is to urgently move away from the politics of division and discord, refrain
from personal attacks and focus on public not personal achievement and away
from negatively campaigning against the country but rather, put emphasis on a
positive genesis. The next step is to get the economy growing again and the
current government has been making the right noises even under the current
disabling conditions but still there is more that can be done. The growth of
the Zimbabwe economy is inevitable, this is coming and there is no way round
that, but the challenge is going to be how to get that growth strong enough
such that the country can regain the losses made since the turn of the
millennium and maintain that. Once gains are made on the losses, the country
will need to achieve an above average growth rate for at least the next 5-10
years uninterrupted to recover from the losses made since 1999, a tough ask but
achievable if all the stages of economic recovery are adhered to.
Zimbabwe’s economy is going to bounce back and bounce back big that is. There is work to be done but this growth will happen. It is low productivity, low output and high unemployment that are the economy’s major drawbacks and for the economy to rebound, these are the main areas that will require urgent attention. The difference between output and employment is labour productivity. In Zimbabwe, over the past 15 years, labour productivity growth has grounded to zero. The key to addressing this productivity problem is to bring real wages to move with labour productivity. The country has everything in place and just requires an urgent injection of money into the economy. Investment, domestic or external, is key as it brings in this funding, funding is important in increasing productivity and companies are likely to expand with financing and investment. Money respects money, even so in a bad economy. The investors are coming to Zimbabwe and that is an unavoidable reality. The key is to retain them, to mollycoddle them if we have to and allay any misconceptions they have about the country’s investment laws.
The Zimbabwe economic crisis was created (again I am not writing the article to apportion any blame) but there is a real danger that the power those that created the crisis has over the country may mean the ground lost over the last 15 years may prove a big challenge to tackle. As a country there is need to understand each and every stage of our economic recovery, understand that things have changed and conditions are different compared to the pre-2000 period. There is no point in believing that things are not so bad and that some knight in shining amour is going to come from some far off lands to save us. As a people we have to free ourselves from that apathetic and defeatist attitude where we are busy convincing ourselves that there is nothing that can be done about our current economic predicament. We have to embrace the severity of the economic situation, do away with some old actions that will not work in the current climate.
There is need to prioritise new skills, new abilities, new personnel and new actions in order to move forward. This is what is going to breathe new life into the economy and then and lead to the reinvention and reinvigoration of this economy. It is about taking new actions and getting new results. If old actions are resulting in old outcomes then the idea is to replace them with new ones. These new actions, new skills and new approaches have to start from the top and cascaded downwards. The top has to sell the idea, make the bottom believe and subscribe to that idea of a home grown economic recovery. At the moment there is too much energy being wasted on who is to blame and little being used to find practical ways to produce our way out of the current malaise. It is about correctly estimating the changes, challenges and efforts required to get the economy moving forward again. Our concern as a country should no longer be about who is to blame but rather what needs to be done. The hard reality is that no one is going to bail us out. It is going to require the collective strength of the Zimbabwe people, the collective effort, creativity and persistence to get the country’s economic wheels turning again. It is about developing new skills for we are confronted with a new economy and these are unchartered waters calling for new set of skills. The old skills that aided Zimbabwe’s pre-2000 economy will fall short going forwards with advent and emergence of this new economy. The risks to the country’s economy are multifold, they remain ever present and focus should be primarily on jobs creation and getting the economy growing again. Last year our economy grew at a very slow pace and that is the first major challenge to address, get the economy growing again. At the moment the economy is not growing, and no amount of speculation, economic theories and models are not going to get the economy growing. See how the statement ‘get the economy growing again’ was repeated? That is because there is no economic recovery that is going to happen with an economy that is not growing.
The nation,
especially the opposition, has to shift away from the unnecessary repetition
about ‘failed policies’ and start a narrative of an economy that can recover.
The government is sending the right signals to would be investors and Zimbabwe
is poised for a more rapid recovery. The upcoming re-engagement EU trip by a
delegation from Zimbabwe including the Industry and Commerce Minister,
Infrastructure Minister and other ministry officials are all positive steps
towards getting the economy growing again. Investors require certainty and a
reduction in investment obstacles. The fundamentals of the Zimbabwe economy are
not exactly broken but require fine-tuning. We are well aware that the natural
productive streak of the Zimbabwe workers and entrepreneurs is still evident. Zimbabwe
is the entrepreneurial hub of Africa and those are the solid foundations of an
economy that is set to take off. There are challenges, a dearth of confidence
and an abundance of uncertainty in the economy. It appears that those entrusted
with the responsibility to make decisions and take actions that would grow the
economy appear to lack the confidence to do that. The government has laid the
right foundations for this economy to grow and now it is up to all Zimbabweans
to play their part in setting that growth in motion. The economy has the
potential for growth, and turning that potential into real growth requires the
right actions and to take action requires confidence. The country is lacking in
confidence because of the uncertainty that is prevailing, uncertainty about the
hereafter and uncertainty and hesitancy about key government policies. There
are some mixed messages about such fundamental policies as indigenization and
empowerment. These are policies that are key to the country’s economic recovery
and they need to be addressed consistently. Clarity and consistency reigns in
uncertainty. There is always a level of uncertainty in this world, however,
there is need to address such uncertainty when it arises and becomes
detrimental to economic growth. Potential investors to Zimbabwe are posing
genuine questions about what they perceive to be the potential of unfavorable
consequences of the country’s policies on their investments. These are issues
that need to be addressed with clarity and consistency. Uncertainty has a
negative impact on the entire economy.
Those entrusted into positions of policy making have to realize that constant interference in the economy does more harm than good. The sky is the limit to the harm that they can do to the economy in their efforts and genuine hope that they are doing something for the economy. The Zimbabwe economy is in recovery, the endless poking and intervention by the powers that be has only helped slow down growth. The economy needs to heal before we can open the wounds again and perform more economic surgery. The current high unemployment (formal) is not sustainable. There is a real urgent need to keenly focus on what can be done by government to help the economy recover and at the same time recognize the limitations of some policy initiatives. The tone from government is pointing to such. The fact that a policy has limitations does not in any way imply that it is a flawed policy, but rather a challenge that can be addressed. The government of Zimbabwe has been receptive and responsive to all these and the actions they are taking today are the reasons why this economy is poised to be second only to South Africa in the next two years. I state this with confidence and certainty.
bernardbwoni.blogspot.com
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