PRESIDENT Emmerson Mnangagwa has a tough task ahead of reviving the country’s comatose economy he inherited from his predecessor Robert Mugabe, industry has observed.
Mugabe, who had been at the helm of the southern African country since independence from Britain in 1980, stepped down last week under pressure from his own party, the military, as well as angry citizens grappling with high unemployment, endless cash shortages and crumbling infrastructure.
Confederation of Zimbabwe Industries (CZI) president Sifelani Jabangwe said Mnangagwa should prioritise the revival of key companies such as the National Railway of Zimbabwe (NRZ) and the Zimbabwe Iron and Steel Company (ZISCO) in line with his clarion call for job creation.
In his acceptance speech Mnangagwa said his government is committed to “create jobs, jobs and jobs” for the majority of Zimbabweans who are wallowing in poverty.
“If the President can expedite the resuscitation of NRZ and ZISCO, which should have a dramatic short-term effect on unemployment, can benefit the economy through the stimulation of downstream industries,” Jabangwe told The Financial Gazette.
At its peak, NRZ employed about 20 000 workers and moved 18 million tonnes of freight annually. The struggling parastatal now moves less than 100 000 tonnes per week showing the devastating effects of industry collapse and poor rail infrastructure.
ZISCO – arguably the heartbeat of the Midlands province – was the largest integrated steel works in Africa with a capacity to produce one million tonnes of the commodity annually and employed over 6 000 workers, but failed spectacularly in 2008 due to government’s chronic mismanagement, corruption and maladministration of the economy, analysts say.
The Zimbabwe Congress of Trade Unions says Zimbabwe’s unemployment is now more than 90 percent.
Jabangwe said it was also crucial for Mnangagwa, who has been in government for the past 37 years and was at one time a finance minister, to immediately address the current cash shortages and help industry to retool.
According to the CZI manufacturing survey, capacity utilisation in the country’s manufacturing sector declined from 47,4 percent last year to 45,1 percent in 2017, as a result of high production costs and shortages of foreign currency.
“He should implement policies that can help businesses to have easy access to finance at the right costs and right tenure,” said Jabangwe, adding that the multicurrency system should be maintained for the foreseeable future.
For nearly 20 years, Zimbabwe has been in default on US$9 billion worth of international debt, resulting in the country failing to access cheap capital due to its high political risk profile — a situation that has resulted in industries operating archaic and inefficient machinery.
That debt needs restructuring, probably with the assistance of the International Monetary Fund and the World Bank.
Zimbabwe National Chamber of Commerce chief executive officer Chris Mugaga said the new president must deal decisively with corruption — a scourge that has seen the country losing billions of dollars annually.
“He should stamp out corruption across the board regardless of who has committed it,” he said adding that Mnangagwa must rise above party politics and do what is right for the economy.
“The president must not recycle deadwood in his Cabinet, but should infuse technocrats who do not have votes to lose but only care about reviving the economy. However, acting Finance Minister Patrick Chinamasa should also be given another chance at the helm of Treasury as he has done a good job of reengagements with the International Monetory Fund and the World Bank,” Mugaga said.
Businessman Shepherd Kembo said Mnangagwa, an admirer of Chinese reformist leader Deng Xiaoping, should instigate economic reforms which will, among other objectives, address issues of investment, production, the ease of doing business and the controversial indigenisation policy.
“The economic cluster ministries should have business-minded people running them and the country must draw a line from the previous regime and start respecting bilateral agreements and property rights,” he said.
Economist Jonathan James believes that Mnangagwa cannot isolate job creation in his bid to improve the country’s economy. Instead, a more holistic approach and concerted effort on all areas of the struggling economy is necessary to make Zimbabwe prosperous.
“Job creation is one thing, but in order to be able to do so, there has got to be a material change in economic plan and structure that invites investment to come in, where they feel that the government is going to operate materially different than they have previously; and that is yet to be seen,” James said. – FinGaz