3 years of economic mirage

By Paidamoyo Muzulu

RECONSTRUCTION is hard work. It means remaking what was once there. And in Zimbabwe, so much had collapsed, including the morals of its citizens.

It has now been three good years, yes a little over 36 months after President Emmerson Mnangagwa took over the country in a coup. He appointed an economics professor, Mthuli Ncube, to be his treasury czar.

Mnangagwa pledged big on jobs, infrastructure, economy, housing and health. He also pledged to crack down on cancer corruption in the country.

Three years later, the country and its citizens may have to consult the dashboard. The numbers are not pleasant in many ways.

Yes, crop production for the 2020/21 season has broken records. Zimbabwe produced a surplus of its staple food, maize. Just over three million tonnes of maize was produced by both commercial and subsistence farmers.

This is an important milestone that deserves to be celebrated. However, the icy fact that some five million people are food insecure is a big stain on the so-called surplus.

It is important to make it clear that the majority of food insecure families are in urban areas. The World Bank and the International Monetary Fund have both recorded an increase in urban poverty.

The phenomenon of urban poverty does not bode well: thousands of people living in a built-up area all look at empty cooking pots, dry water taps and slowly fall into debt.

Urban poverty is an indicator that the industry is not growing, hence the employment figures are suppressed. The majority of those employed are in the informal sector, where wages and working conditions are largely unregulated.

For the few, around 10%, of the civil service and the formal economy, they are confronted with what the International Labor Organization calls wage theft. Salary theft is a condition that occurs when a person earns less than what is necessary to meet their basic needs.

Ncube, the head of the Treasury, tried in the same period to tax the informal sector. It introduced a 2% tax on intermediated mobile money transfer transactions. The tax has been onerous and in many cases has been passed on to the consumer. In many ways, this has been a burden on the working poor whose purchasing power is declining.

So there is no doubt that on the issue of employment, Mnangagwa struggled. He tripped over obstacles.

The economy recorded nominal GDP growth of around 6-7% according to the Treasury. It is much bigger than any other country in the Sadc region. Statistically, this is good, but the question of overlapping the urban poor would push any administration to review its policy.

Among other things, the economy is distorted by double pricing. Politically, Ncube has failed in de-dollarization. Allowing certain goods and services to be priced in US dollars in a country where 95% of workers earn in Zimbabwean dollars is a recipe for disaster.

The growing exchange rate differential between the interbank market and the so-called parallel market has led many families to shortages. As long as this inconsistency in monetary policy persists, Zimbabweans should brace themselves for a bleak future.

On the health front, many Zimbabweans are dying at home. They cannot afford to pay for health care in private hospitals. On the other hand, public hospitals have empty dispensary shelves except for donor funded ARVs, TB pills and antimalarial drugs.

In terms of health, it is important to draw the country’s attention to the emerging scenario of animal farming. The rich and powerful, despite having the capacity to pay for private health care, have been blessed by the state thanks to the new VVIP hospital at Manyame Air Base. I dare say this is an investment that could have had a huge impact if it had been developed at Parirenyatwa or UZ School of Medicine.

It would be unfair not to recognize Mnangagwa’s progress in infrastructure development. There is a significant improvement on the road infrastructure across the country. He also succeeded in expanding and renovating the Robert Gabriel Mugabe International Airport. Also noteworthy are the developments at the Beitbridge border post. These initiatives and efforts deserve to be applauded.

Finally, Mnangagwa’s housing scoreboard is dismal to say the least. Harare and other urban centers have seen significant slum growth. These are new unregulated developments with no on-site or off-site infrastructure. The settlements of Caledonia and Hopley in Harare are classic examples of slums. Over time, these colonies could compete with those of Kibera in Kenya or the Fravelos of Sao Paulo in Brazil.

The sad scenario described above is worrying. This cannot be overstated, especially since we are in the holiday season. For millions of families in Zimbabwe, the holiday season is just a season that they can see on their wall calendars, but cannot live.

This is also the time when Zimbabweans are exposed to growing inequality between rich and poor. Social media will be inundated with photos of the wealthy eating and drinking at exclusive or exotic resorts. Some would post photos of their new private jets, luxury cars, penthouses, summer residences or even sprawling state-funded farms.

In the spirit of sharing that characterizes the holiday season, it is important to remind Zimbabwe’s political and economic leaders of the need to share the country’s wealth and reduce the growing gap between the haves and have-nots.

Ncube and business owners should shift from rapacious neoliberal economic policies to democratic socialism. It is important that government and business agree on a fair model for determining the minimum wage. A minimum wage that meets basic human needs – above the poverty line.

Discussions on national health insurance should be accelerated and concluded for the benefit of all citizens. Health should not only be a right enshrined in the Constitution, but it should be enjoyed by all.

Urban poverty must be eradicated, the economy must be formalized. Ncube should take a clear and consistent policy stance on de-dollarization. The current dual currency pricing is bad not only for the economy, but also for citizens in general.

Zimbabwe has chased away the mirage of economic growth over the past three years. It cannot continue. The results and the success of the economy must be felt and shared by all. Austerity is not the panacea, probably capital excesses must be curbed for the greater good of all.

After all, Mnangagwa must bring the joy of Christmas back to the citizens. The starting point could be to have corrupt greats behind bars. He needs to clean the system. A little hard love is needed, but can Mnangagwa dispense associates and acolytes?

Happy New Year celebrations.

  • Paidamoyo Muzulu is a Harare-based journalist. He writes here in his personal capacity.

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