The International Anti-Corruption Day should mean something to Zimbabweans

Corruption has disastrous impacts on development when funds that should be devoted to schools, health clinics and other vital public services are instead diverted into the hands of criminals or dishonest officials” – Ban Ki-moon, December 2015

9 December means very little to many Zimbabweans but, it is on this day that the world pauses and campaigns against corruption. Lip service to the campaign shows either our lack of knowledge about this epidemic or maybe a resigned sense of powerlessness that often engulfs societies afflicted and affected by corruption. It is surprising therefore that we, who are most affected by corruption are the ones who are doing the least about it.

Our government acknowledges the ills of corruption as evidenced by the many anti-corruption conventions and protocols that it has signed over years. These include The Southern African Development Community (SADC) Protocol Against Corruption (2001), The African Union Convention on Preventing and Combating Corruption (2003) and The United Nations Convention against Corruption (2003). We even have the Zimbabwe Anti-Corruption Commission (2005), established through an Act of Parliament. Conventions, Protocols and Commissions alone without action to prevent the illicit financial flows will not plug the holes that corruption is creating in our society.

Maybe the rhetorical question is that if our government is signatory to many of these protocols, why then is corruption such a problem? The following scandals merely serve as examples : 1987 — Ziscosteel Blast Furnace Scandal,  1987 — Air Zimbabwe Fokker Plane Scandal — $100 million ,  1986 — National Railways Housing Scandal,  1988 — Willowgate Scandal,  1989 — ZRP Santana Scandal,  1994 — War Victims Compensation Scandal,  1995 — GMB Grain Scandal,  1996 — VIP Housing Scandal,  1998 — Boka Banking Scandal,  1998 — ZESA YTL Soltran Scandal,  1998 — Telecel Scandal,  1998 — Harare City Council Refuse Tender Scandal,  1999 — Housing Loan Scandal,  1999 — Noczim Scandal,  1999 — DRC timber and diamond UN-reported scandals,  1999 — GMB Scandal, 1999 — Ministry of Water and Rural Development Chinese Tender Scandal,    2001 — Harare Airport Scandal, (Excerpts from a paper presented by Dr G Shana at the Mass Public Opinion Institute Seminar, Crowne Plaza Hotel, May 9, 2006). I have only listed scandals up 2001. Beyond 2001 the levels of corruption increase exponentially. What has caused our society to watch as corruption extents its tentacles to the core of our nation.

Transparency International Corruption Perceptions Index of 2014 rates Zimbabwe number 156 out of 175 countries with a percentage score of 21. Many in politics might doubt this rating or perhaps take this with a pinch of salt. Be that as it may, what matters in the world of developmental finance, economics and business is perception. If we are perceived to be corrupt, then the decisions on Foreign Direct Investment are based on that perception. (Shouting from “look east” hilltops about Zimbabwe being a victim western perceptions does not change the perceptions). At best, let us fight corruption tooth and nail and at worst, let us be seen to be fighting corruption so that we change perceptions and subsequently decisions on foreign direct investment.

As an example the new President of Tanzania has not done much in the fight against corruption but is being hailed as part of a “new breed of African leaders”- that he maybe, I am not disputing. I however think that the best thing that he has done is to be seen as not tolerating corruption. His unannounced visits to different government departments and firing of officials will definitely change the perception that people have about doing business in Tanzania. If sustained, Tanzania’s fight against corruption will be bruising but it will lead to a better life for the majority.

Zimbabwe Anti-Corruption Commission (ZACC) is a statutory body set up to fight corruption in the country. My problems with this agency are that of integrity and public trust. The public does not trust that this organization acts impartially, without fear or favour and many believe that it is very corrupt. This year, the CEO of ZACC was sentenced 10 years for defrauding the commission. Such actions by key officials cast doubt on the integrity of ZACC and the trust that the people are supposed to have.  I do not remember any successful sanctions or conviction by ZACC since its inception which leads me to believe that it is either ineffective or it is compromised.

A problem with the nature of corruption especially in the African context is that it is thought of as involving “pointing fingers”, which in many African cultures is considered disrespectful. Additionally, given the politics of the land, any “finger pointing” especially when the “fingers” are direct at government will be viewed with a political lens. The end result is a torpid corruption fighting strategy juxtaposed with ideals of patronage. As culture and politics are dynamic, we need to craft dynamic and innovative measures that protect those who report corruption at the same time ensuring that those involved in corruption get their due reward. We have a responsibility to build a prosperous Zimbabwe. That responsibility involves reporting corruption and opening up the fight against corruption to include all key stakeholders.

This International Anti-Corruption Day, let us as Zimbabweans remember the following

  • Prevention, Criminalisation, International Cooperation and Asset recovery are key in fighting corruption (UN Convention on Corruption);
  • The government should restore the integrity and trust of public in the Zimbabwe Anti-Corruption Commission by giving it “teeth” and independence to operate without “fear or favour”;
  • Like charity, fighting corruption can begin at home – let’s start with the small fight;
  • The fight against corruption is not only up to government, each of us should as the ZACC says “Refuse, Resist and Report”;
  • Corruption is a very big stumbling block development. If the millions lost through corruption were channeled toward development, ours would be a prosperous country;
  • As many of you read the above points you would be tempted think, “never in Zimbabwe”, but the reality is that if we do not start thinking about tackling corruption, we shall forever be suffering nation. This International Anti-corruption day, let us fight and campaign to rid our nation of the plague of corruption.

As many of you read the above points you would be tempted think, “never in Zimbabwe”, but the reality is that if we do not start thinking about tackling corruption, we shall forever be suffering nation. This International Anti-corruption day, let us fight and campaign to rid our nation of the plague of corruption.

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No policy follow through in the Zimbabwean Economy

As Zimbabweans we generally think of ourselves as a nation of intellectuals, boasting that we have the highest level of literacy in Africa. This “elitist mentality” has had a negative impact on our growth as a nation as the so called “learned people” keep generating new ideas and policies without any follow through on the implementation of these policies. We change policies and ideals like we are changing underwear.

In October 1990, we embarked on the Economic Structural Adjustment Programme (ESAP). ESAP was aimed at the removal of price controls, removal of wage controls, reduction of government expenditure, a 40 per cent devaluation of the Zimbabwean dollar, removal of subsidies on basic consumer goods, liberalising the foreign currency allocation system, removal of protection of non-productive import substituting industries and increased profit remittance abroad, and a radical restructuring of the various parastatals and other public enterprises. This programme was followed for a couple of years and ditched when the going became tough. To think of it from 1990 till now, we have been thinking about reducing government expenditure and making parastatals profitable. Some say that the reason ESAP failed was that it was a foreign imposed solution. Be that as it may, we accepted and adopted the policy and we failed completely to implement it. Why did we accept the prescription if we felt it was not right for us and “foreign imposed”.

We in 1991, we began to tweak ESAP a bit by introducing the Framework for Economic Reform. This was aimed at specifically at implementing programmes for improving efficiency and management, as well as commercialisation and privatisation of public enterprises. 23 years down the line, we still sit with inefficient, wasteful and poorly run parastatals. If we were unable to improve the efficiency of our parastals when the economy appeared to be performing well, what are the chances that we can make them efficient now when the economy is in a downward spiral?

1998, we then launched what was said to be the second stage of the Economic Structural Adjustment Programme and named this the Zimbabwe Programme for Economic and Social Transformation (ZIMPREST). ZIMPREST was aimed at getting an annual GDP growth rate of 6%, creating 44,000 jobs a year, reducing the budget deficit, increasing savings and investments to at least 23 per cent of the GDP. ZIMPREST surprisingly included socio-political goals such as improvements in the quality of democratic institutions; the pursuit of good governance; and the elimination of corruption. To think what ever happened to ZIMPREST? If there had been full implementation of this policy, Zimbabwe would have been a better place to be. To imagine if the country had improved the quality of democratic institutions and started dealing with corruption in 1998, millions will not have left the country.

Then came the Land policy which still was poorly implemented and lacked transparency. The indigenisation policy followed and was again was poorly implemented. When people now speak about indegenisation, we are unsure what that means as it appears not to apply to the Chinese, Russians and Indians. The indegenisation is so poorly and selectively applied that the ministers give different messages as to what to do about indegenisation. Policies, whatever their nature should be implemented consistently and should not be selectively applied.

The GPA resulted in the ‘Inclusive government” which initiated the Short-Term Emergency Recovery Program (STERP). STERP resulted in real GDP growth of 5.7 percent in 2009 and it is estimated to have risen strongly by about 8 percent 2010, compared with a decline of about 14 percent in 2008. Now because STERP did not fully achieve its objectives, the government introduced a sequel and cleverly named in STERP II. Unfortunately, STERP II was overtaken by political events and was never fully implemented.

We are now faced with this new policy called ZIM ASSET (Zimbabwe Agenda for Sustainable Socio- Economic Transformation). The name or is misleading as it makes us believe that we are increasing ‘assets’ and yet our external debt levels to the Chinese, Russians and Indians seems to be ballooning. It also gets to me that that this policy was born from an election manifesto which means that it is essentially devoid of economic thought and is principled on election promises rather than economic fundamentals. Some of the goals in ZIMASSET are so unrealistic. In 1998, when the economy was still performing reasonably well, the government estimated that it could create 44 000 jobs a year. Fast forward to 2014, the economy is in decline and the same government says to us that it will create 450 000 jobs a year when they failed to create 44 000 jobs a year when the economy was still growing. The targets set in Zim Asset are unrealistic election promises and it does not pass the threshold to be classified as an economic policy.

The most unsettling issue about ZIMASSET is the poor planning and the haphazard manner in which this “policy” is being implemented. Government officials quote ZIMASSET when their actions appear to fortuitously fall in line with the policy rather than tailoring their actions to actually be in line with the policy. South Africa has a National Development Plan (NDP) and a Planning Commission lead by the respected Trevor Manuel to monitor and give guidance with regard implementation of NDP. Contrast this to our situation: I have not heard of a planning commission for ZIMASSET or calls for comments on the policy. There is no one ministry championing this policy. We only hear of it when people want to score political brownie points. The lack of planning, monitoring and reporting on this policy will ultimately result in it being abandoned.

When I think of Zimbabwe and Zimbabweans, I see ideas, ideals and policies galore. Unfortunately I also see large black holes when it comes to implementation of the ideas, ideals and policies. Until we find it in ourselves to be able to efficiently implement policies with consistency and with follow through, we shall forever generate good policies while being spectators to our burning mother land.

Zim over taxing the hungry and impoverished

It is said that there are two things that are certain in life, death and taxes.  For many Zimbabweans, it seems increases in taxes and tax rates at times appear more certain than death itself. Our government is relentless in introducing new ways of taxing the people and collecting revenue but has performed dismally at efficiently and effectively utilising these tax revenues.

Why are we being taxed so heavily? The government has run out of sources of income and appears to have no other ideas on how to raise money to be able to run the country. A more sinister answer would be that government officials need to fund their lavish living so they need a bigger share of the little that we have. Whichever way one looks at it, the government is out of cash and needs to get money from somewhere and we are easy prey, dormant and on many occasions appear docile.

In Zimbabwe, we pay income tax, social security contributions and VAT like in all other countries. There is then the AIDS levy, the proceeds of many question if they are being used for the intended purposes. Over and above this there are other revenue collection instruments that the government employs. These include but are not limited to company tax, Capital gains tax, stamp duty, customs and excise duties, carbon tax, skills and standards development levies and mining royalties. These taxes are generally high when one considers the level of income of the average Zimbabwean.

The people are struggling to feed the families and one would expect the “people’s” government to see the plight of the suffering masses. Instead, the Minister of finance stands up in parliament to announce the imminent of arrival more taxes. Among other things, the government going forward will start taxing housing allowances, increase excise duty on diesel and petrol, increase customs duty on vehicles, introduce excise duty on airtime, introduce of import duty on cellphone handsets. It feels like the parents are determined to wrestle supper away from the children. These measures squeeze both individuals and companies alike and do nothing to stimulate sustainable economic growth.

The vendors in Harare from this month are paying a “daily tax” – surely one would think its insane to tax the most vulnerable who are trying to make ends meet, but no, it’s only the beginning.

I have no problem with toll gates, but it bothers me that the government increased the tolls fees by 100% in 2014 when the economy is in decline. The government still intends to introduce 30 more toll gates throughout the country. That for me transcends raising cash for maintenance of roads to sheer disrespect.

Many that I speak to who use the Beitbridge boarder post are irritated by TIPs, gate passes, carbon tax and third party insurance. You literally pay to be allowed back into your country. We grudgingly pay what Caesar requires with the full knowledge that none of the money is will be used for the intended purposes.

What are the alternative to excessive taxation? Reduce government expenditure by – reducing the size of the cabinet, reducing the size of the army as the country is not at war, reducing revenue outflows that occur through corruption, effective debt management and ensuring a sustainable debt level. Is that too much to ask?

I met a guy from New Zealand who seemed overly happy about paying taxes to his government. For him it was simple, because he paid taxes, he did not need to get health insurance, his children’s education was heavily subsidized and could rely on his government for social relief in case of financial distress. I compare that to our situation and can’t help but get a deep sense of sadness. I can’t rely on my government for social support, or for medical insurance or for my children’s education or for security – and yet I pay my taxes, excessive they might be. I repair my car often because of potholes yet I pay excessive toll fees.

When all is said and done I just feel that the level of effective tax if calculated can be above 50% of an individual’s income if one takes into account how much we pay through all the tax instruments instituted by our government. I therefore want to ask our finance minister to consider the hungry, malnourished and impoverished when designing policies especially those that affect people’s bread and butter. That’s all.

@tpmkumbuzi

Can 10 Billion USD from the Chinese be the antidote to the Zimbabwean Economy

Many things have been said about the potential 10 Billion dollar loan from the Chinese. This is apparently the boost that the Zimbabwean economy needs.  Those in favour of the loan seem to be using an economic instrument to prove a political point. The politics is that Zimbabwe still has international friends who can help and the economics is that this loan will kick start the economy and spur economic growth.  Can throwing 10 Billion dollars at the Zimbabwean economy be the antidote?

Zimbabwe currently has an external debt of 10 Billion dollars and the country intends to double the external debt to a staggering 20 Billion dollars by borrowing from the Chinese. Can this loan be repaid, what is the impact of external debt on the economy and is leveraging of the country’s resources the solution?

There have been many academic debates on the impact of external debt on low income economies. The Debt vs GDP ratio is used as an indicator of a country’s ability to repay external debt. In 2013, the South Africa’s Debt Vs Gross Domestic Product was 46%, Zambia’s was 34% and UKs was 90%. The most reliable figure for Zimbabwe based on 2011 figure was a Debt Vs GDP of 150%. Doubling the external debt would bring this ratio to over 200%.  So we want to get debt levels that are significantly more than those of countries whose economies are performing better than us. Can this be good for us?

With a debt ratio above 200%, it might be difficult for the country to repay the loans. With all factors pointing to the fact that Zimbabwe will not be able to repay the loan, why then would the Chinese be willing give such a loan. The only answer lies in the fact that we are giving them the mineral resources as security. So they know that the country will never be able to repay the loan and are simply buying the vast mineral resources for a song. Would you blame them? Future generations of Zimbabweans are the biggest losers as they will have to dance to Chinese tunes. They will have to feed from the palms of the Chinese simply because we decided to buy ice cream with their education fund.

The priority for mineral rich African countries should be to invest the natural resource revenue in the people. The priority for Zimbabwe should be to reinvest mineral revenue in the people of Zimbabwe and not in repayment of Chinese loans.

The debt is excessive and will strangle the country. High debt means high repayments, altering the nature of public spending.  The high external debt repayments mean that there will be reduced funds for public investments and infrastructure development. As opposed to building more hospitals, we will have a Chinese debt noose over our heads.

Because of the cash flow problems facing the country, there is a real danger that there a significant part of the loan will be used to fund operating expenditure such as salaries. The problem is that using long term debt instruments to finance short term consumptive expenditure will inevitably lead to the default as operating expenditure will not create new revenue streams which can be used to repay the debt.

How did the government come up with a figure of 10 Billion Dollars. Is there a plan for this money or its going to be used to pay salaries? With the high levels of corruption in the public sector, will the money used effectively? These and other questions make many Zimbabweans uneasy about the loan.

It has to be noted that external debt contributes positively to growth up to a point, and from that point negative effects set in. Throwing 10 Billion dollars at the Zimbabwean economy will not necessarily get the economy kicking. There has to be detailed planning about what the money will be used for, sustainable debt repayments and setting debt limits based on a sound understanding of the country’s growth trajectory.

 

 

 

A diamond wish for the Zimbabwe 2014 National Budget.

As the likes of Joseph Chinotimba, Patrick Chinamasa and other Honourable Members of Parliament prepare to attend the 2014 pre-budget parliamentary session at the Victoria Falls, we make a wish about the inclusion of diamond revenue in the Zimbabwean 2014 National Budget. Presenting such a wish for the 2014 National Budget appears to be a fool’s errand because Mr Chinamasa might never bring diamond revenue under the control of the Treasury. We however have to believe that every Zimbabwean wishes to see the country prosper and we have to continuously propose solutions to help the country grow.


All diamond mining companies must pay the normal or general taxes to the government. These taxes include Company Income Tax, VAT, Employees Tax and any mining royalties. My definition of diamond revenue excludes these taxes because in my opinion any company incorporated or operating in the Republic of Zimbabwe should pay these taxes without compromise. My definition of Diamond revenue refers to profits that are made by the diamond mines after paying all statutory taxes.

I blindly give reference to media reports that the government has 50% holdings in most of the diamond mines in Marange. I use the term ‘government’ to include all purported holdings by the Zimbabwe National Army and the Zimbabwe Republic Police. Since government is said to be a significant shareholder, it should thus receive a significant dividend from the diamond mining firms. My wish is that all dividends due to the government should be remitted to the Ministry of Finance. A suggestion on how to use the diamond revenue is to set up 2 funds, one assisting in provision of basic services and the other aimed at kick-starting the economy.

Economic Recovery Fund

It is beyond question that the Zimbabwean economy has the potential to be one of the strongest on the continent. For the economy to recover we need to institute wholesale changes to our policies and also to our economic thinking. One way of kick-starting that recovery is the creation of an Economic Recovery Fund using diamond revenue from Marange. Given availability of diamond revenue, treasury has the opportunity to inject large amounts of cash into the economy in a manner that can stimulate and spur the economy.

For the diamond backed Economic Recovery Fund to function effectively it should be a public and private partnership, where the government (through diamond revenue), the private sectors and international bodies can contribute to the fund so as to boost the size and reach of the fund. This fund then requires sound management, a clear objectives, well-defined strategy and accountability. South African has such a fund called the National Empowerment Fund which is funded by the SA Ministry of Finance with the objective of empowering historical disadvantaged individuals in business. Even though the objectives of the National Empowerment Fund and the Economic Recovery Fund are different, the funding and investment model used can be similar.

The ERF can be made semi-autonomous with the power to decide as to which projects to fund and the funding criteria. The Ministry of Finance should provide the mandate and strategic goals of the fund. The fund can then be able to finance business and provide the necessary liquidity. Accountability, financial reporting and transparency within the fund should also be emphasized.

Basic Services fund

A Basic Services Fund will support the delivery of basic services in education, health, water and infrastructure. This fund can house both community based initiatives and state based initiatives. The key stakeholders of the fund should be local authorities, hospitals and schools. The managers of the fund must work closely both the Ministry of Finance and respective service ministries to plan, implement, monitor and report on the activities of the fund. The trustee of the fund (Ministry of Finance) should not only initiate the fund but it should also allow other stakeholders such as the private sector, churches, NGOs and the international community to add to the fund. It however has to be noted that these organisations can only be enticed to get involved if there is transparency, accountability and good governance in the management of the fund.

It is thus important for Minister of Finance to consider bringing the Diamond revenue into the National Budget in the sprit Ubuntu so as to provide basic services to our people. Diamond revenue can hence kick-start delivery of basic services to the people. We cannot keep looking at only the international community to provide health care or water for our people. We need to start helping ourselves

These two funds alone cannot change Zimbabwe overnight but they can be part of the consolidated economic and service delivery solution of getting Zimbabwe working again. The Minister of Finance has a choice to make, taking a begging bowl again and going around the world or including diamond revenue in the budget. We wish for the diamond solution because it is a home grown solution which utilises local resources to benefit the local people and will have no strings attached. It however remains to be seen whether the powers that be truly believe in Zimbabwean solutions for Zimbabwean people.

The 2014 budget and the need for accountability: Tips for the Zimbabwean Finance Minister

The importance of the national budget in any economy cannot be over emphasised. The budget shows the implementation of government policy for the short to medium term. The budgeting process should be consultative, with each government department setting out its priorities and agreeing with the Minister of Finance on areas that the budget should focus on. But what do we as Zimbabweans want to see in our 2014 budget?

A budget is not an end but shows how the government will utilise available resources to deliver services to the people. By law, each government institution should stick to its budget and ensure that the allocated funds are used for their intended purposes. This then raises the need for the audit of government entities and performance management to enable the public to see how public funds have been spent and also provide a baseline for future budgeting.

In the 2014 budget, I simply want to request the Minister of Finance to allocate adequate resources for the audit of government institutions (Internal and External audit), the audit of pre-determined objectives (Performance information) and on Governance.

Audit of Government institutions.

I applaud the efforts of the Controller and Auditor General (AG) of Zimbabwe in trying to audit government institutions. I however feel that there is need to strengthen the work of the Auditor General in Zimbabwe.

The government allocates funds to different institutions on an annual basis, but there is inadequate reporting on how those resources have been utilised. There is no sanction where there has been misuse of public funds. The AG recently indicated that there has been an improvement in financial reporting in government. If such an improvement exists, then where are the audit reports for the government departments? These reports should be tabled in Parliament and made public so that the nation is informed. I believe that the office of the AG can be used in assisting the public to gain trust in the functions of government.

By strengthening the office of the AG and ensuring that all audit reports are tabled before parliament, the government will be able to evaluate if services have actually been delivered. The current budgeting process is being done on a flawed basis as the baseline used is incorrect. The Minister of Finance does not have audited figures of to be able to truly know the actual expenditure spent on various government programmes. Knowledge of the current expenditure helps in determining future allocations as government will be able to identify areas of under and over spending and redirect resources accordingly. Our current budgeting process is based on political priorities and is divorced from reality.

At the mentioning of audit and accountability, Zimbabweans, especially those in politics think it’s a witch-hunt or shamming exercise. This is not politics but finance. We should not simply perform government audits because they are performed the world over, but we should understand that audits assist not only the governance process but also aid in ensuring service delivery and ensure accountability of those entrusted with public funds. I await the day when the audit reports for ZUPCO, ZMDC, Mbada diamonds, Ministry of Home Affairs or Ministry of Health are tabled before parliament. But that process starts with the Minister of Finance allocating adequate resources for the audit of government institutions.

Performance management

Our budget for 2014 should not be drawn up for compliance purposes. It should be aimed at delivering services to the people. The amounts allocated in the budget should be used for their intended purposes. The government should thus put in place mechanisms of ensuring that the government departments report on how they have fared in achieving the objectives set in the national budget or in the strategic plans.

I should urge the Mr Chinamasa to continue the implementation of performance management that was started by Mr Biti. He should however take is a step further by requiring that all government departments to report on how far they have gone in achieving pre-determined objectives. These performance reports should then be audited by the office of the Auditor General to ensure that the reported performance is reflective of the actual performance.

Internal audit and governance

Our budget for 2014 should allocate resources for improving governance within the public sector. A way of improving governance is ensuring that each government institution has a functional internal audit unit and an Audit Committee. These two related institutions are critical in improving internal controls, promoting good governance and also in ensuring accountability. The will also assist in ensuring that each government department is fulfilling its mandate within the precepts of the law. This is not anything new but it needs to be re-invigorated to ensure that the public sector governance is improved. However, this again starts with the Minister of Finance prioritising the need for good governance in the 2014 Budget.

Why entrepreneurship in Zimbabwe has not resulted in economic growth

It appears that everyone in Zimbabwe is an entrepreneur. Cambridge dictionary’s definition of an entrepreneur is – “Someone who starts their own business, especially when this involves a new opportunity”. So by virtue of the multitudes having one venture or another, we are practically a nation of entrepreneurs. So why can we not turn our entrepreneurial might into sustained economic growth? Why can’t we see the emergence of more Strive Masiyiwa-like business people?

The answer to the above two questions lies in asking a third question: When does entrepreneurship not lead to economic growth? Below I have highlighted some factors contributing to a stagnant economy despite our entrepreneurial activities.

Exploitative entrepreneurship

I consider exploitative entrepreneurship as any business or venture that profits without regard to the accepted social and cultural norms and the wellbeing of others. But is there a relationship between social dynamics and economic growth? Kombi drivers from my beloved Budiriro 5 in the late 1990s come to mind. The normal fare to Budiriro was $10, but they would double the fare to $20 if it started raining. The rain would not add to their cost but would simply present an opportunity for them exploit commuters who did not want to be rained on. The drivers saw opportunities to make money in the rain but there was no production or value added in the said venture. There was no consideration as to fairness or financial impact on the commuters. There was no value addition or production, but simply an unfair transfer of money. We need to guard against ideas that make the individual profit at the expense of the majority. Such ideas breed a culture of greed and do not encourage innovation but rather exploitation. Such ventures rob the working class of potential savings which are important for the functioning of financial institutions. Exploitative entrepreneurship does not cause economic growth as few benefit (and live extravagant lives) while the majority wallow in poverty. The majority are robbed of purchasing power meaning that industry will not be profitable.

Occasion entrepreneurship (One hit wonder)

Entrepreneurship involves identifying opportunities. In Zimbabwe we have one hit entrepreneurs, who come across opportunities (‘Gap’) and make a quick buck, buy an ex-japan car and are back at the same cashflows as before. This represents the majority of the Zimbabweans, always looking out to hear of where there is a shortage of anything and try seek supply to meet the demand. Such business practices are not sustainable and do not add economic value as one cannot consistently be guaranteed that an opportunity will come their way. The income from once off deals is often not reinvested but is consumed callously. Once off deals are good as long as the individuals understand the need to reinvest the proceeds as opposed to having a consumptive mentality to profit. (Kudya mbewu). For there to be economic growth, there has to be both constant idea generation and also constant production. Once off deals do not bring individual or national sustainable income. Thus, for our ventures to result in economic growth, they have to be sustainable and continuous ventures.

Value creation and hunter gatherer budgeting.

Until recently, Zimbabweans associated term “Hunter gatherer” with the Khoi-san people, but the Honourable Tendai Biti linked the term to our country’s fiscal policy. I would also like to link it to our entrepreneurial approach. Our entrepreneurs can only invest what they have gathered. Our people have very little disposable income and consequently very little investment income. This means that their business will be limited to buying and selling airtime in the streets or other small ventures. Even though this feeds families, it does not create additional employment as most of the ventures are one man part-time shows. Our entrepreneurial activities are under capitalised and under- funded. Our “hunter gatherer”/cash budgeting approach to development limits the amount of capital available for people to invest in enterprise. Entrepreneurial activities in Zimbabwe have not led to economic growth because many are of the ventures are very small scale and only allow the entrepreneur to feed the family on a monthly basis as opposed to growing industry and trade. There is little or no pooling of resources to enable business growth.

Where entrepreneurship does not contribute to the fiscus.

I am not against the informal sector which by definition is informal because of lack of regulation. I would however want to point out that where more than 50% of the population is involved in informal activities, there is need to make that sector formal. Governments get money through taxing individuals and companies. Entrepreneurship in Zimbabwe does not add to the fiscal kitty. As a result there can be no infrastructural investment by the government as there is no revenue source. Such infrastructural investment is key for development of industry. It is simplistic to think that the Zimbabwean government can lift the economy through diamond revenue. Diamond revenue can provide a platform for the development of infrastructure but it cannot be the only source of funding. Our entrepreneurs have to play their part with regard taxes. Only then can our entrepreneurship lead to economic growth.

The role of government in promoting entrepreneurship

The government is responsible for shaping economic policy and creating an enabling environment for all enterprise to flourish. No clear policy direction has been established. This causes people to shy away from investing in enterprise. One can sight the small scale farmers who were given land as entrepreneurs and the move as a beacon of government involvement in entrepreneurship. However, my contention is that even the small scale farmers have received inadequate support to the extent that they have only been able to produce enough to feed their families and not the nation of Zimbabwe. Until government accepts an increased role in supporting entrepreneurs and creating an enabling environment for the growth of business, our ideas shall always remain barren and our bellies shall forever become empty. Government support should also be conditional and transparent. Government support should not only be financial but it should also be technical. Government policy should be friendly to business.

By TP Mkumbuzi

Lets make the choice to move Zimbabwe’s economy forward

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From the 18th of April 1980 to the present day, Zimbabwe faced many key economic challenges. At independence the economy had an extremely capitalist outlook which at the time was among the most structurally advanced economies in Africa. We took charge and mashed it together with politics and the results are not hard to see.

We initially adopted a socialist approach, placing significant reliance on international aid. Such reliance on international aid was our first mistake. As the nation was in infancy, we were then plagued with disease i.e Corruption, mismanagement and misallocation of resources and no medicine was administered to cure the disease. Instead, we clothed our nation with long drapes to cover the boils and lesions of corruption and mismanagement. Our inability to cure our infant nation was our second economic tragedy and because of this, the scourge has grown to become a culture of corruption, greed and patronage.

We then went through a phase of economic experimentation, trying out different policies for different reasons (Political and economic). From the Socialist policies the early 1980s to the Economic, Structural and Adjustment Programme, devaluation, price controls through to the current Empowerment drive. It seems to me that we do not know what our nation is suffering from so we simply go from shelf to shelf, administering available drugs. The signs of the illness were there and are there: unemployment, shortages, inequalities, increasing deficit, increased public spending. There came many other issues like land reform, ‘gonomics’, unbudgeted spending on DRC war and on payments to liberation war veterans. The above concoction led to economic decline. Economic experimentation was our third economic tragedy.

Regardless of the above mentioned challenges, the country is endowed with natural resources, such as gold, diamonds, iron ore, platinum, coal and natural gas, just to mention a few. The country has an educated population and has a high literacy rate. Zimbabwean professionals have transformed the diaspora while the motherland bleeds. The people are entrepreneurial and astute business men and women. The country is awash with sporting, musical and artistic talent that only needs nurturing to blossom. The soil and climate gives opportunity for the country to be a bread basket. These opportunities await but their realisation seems ever so dependent on the politics of the land, and not on what the people of the land need.

As a nation, we are at a crossroad and we need to decide where to go. We can step into economic oblivion or we can choose economic prosperity. I choose economic prosperity because I believe in Zimbabwe’s potential. I believe in a people who can ride the wave of any challenge. I choose to help Zimbabwe take its place as an economic powerhouse. I ask for God to bless Zimbabwe and all her people.

Getting the Zimbabwean economy working for the children of Zimbabwe.

Ideas for growing the Zimbabwean Economy and creating a stable business environment. Analysis of the factors affecting the growth of the economy.