Creating $100bn economy possible

The late Steve Jobs once said “. . . . the ones who are crazy enough to think that they can change the world are the ones who do”.

By Vince Museve

In my opinion, Zimbabwe has some of the largest mineral reserves in the world that indeed with a little bit of organisation, audacity, good planning and project management we can indeed build US$100 billion dollar economy if not more within 15 years.

Where do we start?

Firstly we have to acknowledge why we are where we are. We are here because of sheer economic mismanagement, bad policy implementation and too much focus on politics and not economics.

As a result economic consequences of bad political decisions have always been secondary and have been ignored and considered an irritation. We have failed as a country to have a compelling inclusive national vision which is led by an accountable political leadership.

Zimbabwe is therefore not poor but poorly managed and we have to simply go back to the drawing board and re-invent our country so that we can unlock its full potential to the benefit of all Zimbabweans regardless of their race, gender, age, religious outlook, tribe or political affiliation. It is then that we can only unleash the talents and skills of our highly day citizens.

What is the plan?

There is no doubt that our country is now in an emergency situation and we need first to address the socio economic crisis. We therefore need to quickly arrest the general decline and worsening of life conditions for our people.
We need a three phased approach.

The first phase must be a recovery phase where we restore normality. This can be done by the establishment of the Zimbabwe Economic Recovery Fund. Such fund must of course be managed differently and not through existing partisan institutional framework but through the establishment of a fund management entity which is independent from political interference.

In this recovery phase we must quickly deal with social welfare, health, poverty and access to basic services such as clean water, repair public utilities, infrastructure rehabilitation, agriculture production revival, industrial revival and stabilisation of the money markets.

Our second phase must be that of transformation where we begin to address our institutional framework and legislative reforms including the structure of governance both at national and local level. We have to inculcate a new value system within the civic sector, public sector and private sector. More important must be devolution of both political and economic power and the establishment of the appropriate framework.

In this phase we will need significant investment drive which focusses on key economic and social transformation to create a viable economic architecture which is highly productive and inclusive.

Our third phase must be that of creating sustainable development underpinned by investment in our human capital potential and investment in research and development as a country. In addition regional integration will play a key role in expanding both our capacity and access to markets as a country
What are the key economic drivers?

There is no doubt that agriculture must continue to play a key role in triggering sustainable economic and social transformation. This requires not the reversal of land reform but its rationalisation and full utilisation of land assets underpinned by secure tenure. Important is the compensation of farmers and the injection of new capital to rehabilitate agriculture infrastructure and productivity.

We all know that Zimbabwe’s agricultural sector has long been vital to its economic stability and growth. Not only does it form the basis of the direct and indirect livelihoods of almost 70% of the population, but overall economic growth, including that of all the other sectors, is also directly linked to the performance of this sector.

Around 11 million hectares of arable land, currently sits under the control of the government as a dead asset. Yes, a dead asset, because that land has no commercial value whatsoever.

In addition, the neglect of agricultural infrastructure maintenance since 2000 has resulted in vast pieces of productive land being underutilised and their infrastructure dilapidating or stolen.

Zimbabwe arable agriculture land can be used productively not only to reduce food imports, but to export food to the SADC and COMESA region which has a population of 600 million consumers.

We must target agriculture to contribute up to 30% of GDP growth.

Second we have to take full advantage of our mining endowments which is wealth we are sitting on. We must turn our mining resources into a blessing and this requires a re-look at our legal mining regulations which must not stifle investments or productive endeavour.

Zimbabwe is well endowed with numerous mineral resources with 40 different minerals and 800 operating mines, but even this government has admitted that it is failing to unlock the full potential of this country. Without strong institutions and good macro policies, even the very best mining policies will not deliver the investment output, jobs and exports that we need.

The key success factors in this sector are political leadership, institutional renewal, policy consistency and accountability, crackdown on corruption and IFFs, effective and fair tax laws, aggressive capital mobilisation increased investment is exploration activity, infrastructure development and beneficiation where it makes economic sense.

We have to maximise revenues through beneficiation but critical will be investment in exploration and research so that for once, we can be aware of what minerals we have and where they are. Added to this we must come up with creative investment models which create win-win outcomes for country and investor.

Mining can indeed contribute up to 30% of our GDP in the future.

Third is the issue of industrial revival. Our industrial policy must be anchored on three pillars, namely industrialisation, competitiveness and regional integration and aims to turn the region from an exporter of minerals to a key global net exporter of processed goods.

Zimbabwe has actually de-industrialised over the last 17 years since the chaotic fast track land reform programme of 2000. As a country where 60% of industrial inputs came from the agriculture sector, it is no surprise that the decimation of agriculture remains the main cause of the collapse of local industry, the increase in unemployment and the proliferation of cheap imports from China.

We must deliberately increase the production and consumption of local goods to reduce imports, increase local demand and capacity while improving our trade deficit. Heavy investment in new technologies and production process will be critical while our energy policy needs to be robust and innovative to reduce production costs.

An industrial revolution in Zimbabwe is possible sometime in our future, but this can only happen when we radically change our paradigm from the continued reliance on primary production to manufacturing.

Manufacturing contribution to GDP must be ramped to 30%.

The third phase will be that of sustainable development and this requires heavy investment in human capital development and regional integration.

Human capital refers to processes that relate to training, education and other human capacity building initiatives in order to increase the levels of knowledge, skills, abilities, values, and social assets of the citizens of any country.

Developed countries have become developed through continuous investment in research and skills development.

Differences in economic growth across countries have become closely related to cognitive skills.

Human capital, or the education, skill levels, and problem-solving cognitive abilities will be the competitive advantage of nations in the twenty-first century global economy.

This simply because they enable individuals to be innovative and productive in a highly competitive global economy.

It is therefore essential for us to invest in this if we are to be a competitive nation in the future.

We can therefore have agriculture, mining and manufacturing contributing up to 90% of our GDP while services such as tourism and finance must play a significant role in our growth trajectory.

Another Zimbabwe is possible!
Musewe is author and economist. These New Perspectives articles are co-ordinated by Lovemore Kadenge, president of the Zimbabwe Economics Society (ZES). Cell no. +263 772 382 852 and e-mail kadenge.zes@gmail.com

%d bloggers like this: