Tendai Biti Wananchi ,another day flies by ,with its dusty grains of debilitating ,pain and reversal. Stagnation,indifference , pain and shock are the dominant discourse of the day. It has been such a long time ,when this country was mired is such deep senselessness ,helplessness and numbness. When citizens speak in whispers and move in the shadow of their being ,when citizens speak in idioms and hum out lullabies and not lyrics ,when darkness shines brightly even in broad day light ,then something is very amiss. But it is not sustainable to continue under this slump.It is not feasible to to lie in this prostrate state of half life and half sleep.A step beyond somnolence. It is self evident in the post election era ,a major prescription is required to reenergize this country and to unleash the full potential of the nation. As is common cause the greatest weight on the nation remains corrosive unsustainable politics.Politics of exclusion,of hatred of denigration.Most importantly politics of intolerance. The heavily rigged and heavily contested election ,has produced an outcome that is so false ,ridiculous and Illegitimate . . This charade has further exacerbated a situation that was already inflammable and unsustainable .A situation that was already so fragile and so volatile. So almost five years to the day that the GNU was executed ,the country is in a more dismal and uncertain territory. The signs of reversal are there.The collapse of business confidence,the collapse of the Stock Ex change ,the run in,and the stagflation. This is a situation that needs reversal before it turns systemic. At the Ministry of Finance in the last four and half years ,we worked tirelessly to achieve macroeconomic stability ,some growth and discipline in a system which bar the smell ,was largely a dog house. Inherited inflation ran into billions,capacity utilization was below two percent ,the country had gone for 14 years of sustained growth declines of to -14 % by 2008. Between 1997 and 2008 the economy had lost 60% of its value.Social services had collapsed and revenue collections were basically non existent. Through the Short Term Emergency Recovery Program we effected a turn around based on an eagle eye focus on macroeconomic stability ,supply side recovery ,removal of controls and dirigsme and a pro poor Program of establishing social safety nets . At the epicenter of the stability was the formal legislated adoption of multiple currencies with the Rand as a currency of reference.This we did in late February 2009.We officially demonitised the Zimbabwean dollar in March 2009 and basically killed same. Most importantly in era of expansionary and rampant fiscal expansionary policies most of which was what they called quasi fiscal activities ,we knew that we had to live within our means and balance the books. Thus the mantra became ,a simple one,we eat what we kill.We eat what we hunt. If you catch a mice you shall can not have a festival.The challenge of erstwhile fiscal policies was you catch nothing but you have a banquet. In the end huge budget deficits were created. Now as an fiscal economist will tell you, a budget deficit per se,is not a disaster ,sometimes it is actually good economics.However the challenge is always how you finance it. In the case of Zimbabwe ,the budget deficit was monetized through a busy printing press and of course the inevitable happened.Broad money supply simply short up to over 1000% of GDP and over course hyper inflation was the natural product. To the lay person we had too much paper money in circulation chasing too few goods. But a tight fiscal policy was not necessary planned.We had no choice .There was simply no meaningful revenue being collected.In January 2009 revenue collected was $4 million,February $15 million and in March $30 million. At that present time the wage bill was $30 million . L I was asked at a press conference in February of 2009 how I had managed to pay February salaries and my answer was "takiya kiya" That is exactly what we were doing those days without making full disclosure our dexterity and imagination. Fiscal discipline paid off.We lived within our means and therefore managed to build some fiscal buffer that enabled us to direct some key resources into capital projects and social obligations. By end of 2009 we were collecting $90 million a month ,we had brought inflation down from 500 billion % to -7%. There was a growth of 5.5% ,way above the average Sub Saharan African figures of -2.2%.Remember this was the period of the Global Economic Crises. By 2011 our growth was 9.5% ,a figure recognized by the World Bank as the fastest growth rate in the World for that year. In between we also had carried out major reforms in Government ,including major amendments to the Reserve Bank Act,a new Public Finance Management Act,a new Audit Office Act ,a new Central Deposit Act and later on major amendments the Securities Commission. Act ,a new Macro-finance Act to name a few. During this period the most frustrating thing was the interference of politics in our work. Going foward it is clear that the political situation which makes everyone in this country from ,a taxi driver,a six year old or a pastor into a whining political analyst must be addressed . The crises of illegitimacy brought about by a contested election must be urgent starting point. But much more than legitimacy must be found a solution to make the political tribes of Zimbabwe find a common Vision that can allow them to squabble with honor whilst allowing the country to move foward. Thirdly it is important to protect and sustain the culture of reform discipline and austerity we had concretized at the Ministry of Finance in the short term period until such time as the economic base has expanded sufficiently as to meet the insatiable demand for fiscal resources. The completion of the SMP is simply obligatory . To me my greatest fear is that of an expansionary fiscal policy where resources and commitments will be made as if money grows on trees. A national disease that I once described as fiscalites.The pain of spending money oblivious of where it is coming from.The "eating of money as if there is no tomorrow " Tough sober decisions need to be made.Industry needs money,agriculture will require money,civil servants will require money.Capital projects will requir money. The national cake is not large enough for all these. That means the country requires urgent capital in the form of foreign direct investment ,overseas development assistance . Most importantly supply side recovery is imperative we have to produce ,produce and produce. The country s current account ,and capital account position is simply not acceptable. I do not see any evidence of a political will ,leadership and wisdom to address the current state. Instead it is a reproduction of the same old clue less sterility,conflict ,slogans and pure infantile vituperations. The country needs to move on . But lets decapitate the demon of predatory politics. That is the challenge of our times. Stay blessed and strong.
Posted on: Fri, 30 Aug 2013 04:58:11 +0000
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