‘The end of the beginning’

Zimbabwean government Professor Mthuli Ncube

In November 1942, following the Second Battle of El Alamein in Egypt, British Prime Minister Winston Churchill stood to address the House of Commons.

Prof Mthuli Ncube

After three long years of war, characterised by difficulties and retreats, in which British forces were forced from continental Europe and from much of South-East Asia, Churchill was finally able to report that “we have a new experience. We have victory”.

In a speech that has gone down in history, he went on to tell the House that, “This is not the end. It is not even the beginning of the end. But it is, perhaps, the end of the beginning.”

In recent weeks, I have been reminded of this speech and the sentiment surrounding it. For looking at the state of the Zimbabwean economy of late, the signs are now clear that the worst is behind us.

We are moving forward. As Churchill said, this is not the end, nor is it the beginning of the end. But it is the end of the beginning.

This surge of optimism is of course, in part, driven by the arrival of coronavirus vaccines to our borders. It was a proud moment for us all to see our countrymen and women begin to be vaccinated last month, and we eagerly anticipate the arrival of the next batch of vaccines.

These vaccines will enable us to re-open our economy, prudently and cautiously, and gradually return to usual economic activity. It is my sincere hope that through mass vaccinations, our country, our region and the world as a whole will overcome the coronavirus once and for all.

Yet the feeling of positivity runs much deeper than the vaccinations. Instead, it comes from a cold, hard look at the underlying economic data, which is all pointing in one direction. Up!

Our latest Budget projected that our economy will grow by 7,4 percent in 2021, a huge rebound from the 4,1 percent contraction in 2020, caused largely by the coronavirus.

The more conservative IMF projection of 4,2 percent growth still represents a significant increase, and a vote of confidence in our financial management from one of the most important global financial institutions.

Projections for Government revenue are equally positive, with $391 billion projected for this year, more than double 2020’s $173 billion. And throughout this challenging period, Treasury has maintained a surplus of over $6 billion on its accounts at the RBZ, which has been utilised towards emergencies, natural disasters, the coronavirus pandemic and capital projects.

Perhaps, the most important figures relate to inflation. In February, the inflation rate stood at 322 per cent year-on-year, compared with 363 percent the previous month.

On a month-by-month basis, February’s figure of 3,45 percent compares well with the previous month’s 5,43 percent.

While these numbers are of course still too high, they are a far cry from the hyper-inflation predicted by the “experts” not so long ago. And most importantly, things are going in the right direction  inflation is slowing rapidly.

The RBZ has projected a highly respectable annual inflation rate of about 10 percent by the end of the year, and as things stand, we are on track.

The positivity emerging from these figures is making even our staunchest critics stand up and take notice. Bloomberg, one of the world’s leading financial news outlets, reflected this shift in sentiment, publishing an article entitled; “Business Leaders Sound Unfamiliar Note in Zimbabwe: Optimism”. The article listed the successes of recent months, noting the “sea change” from the type of pessimism so often associated with Zimbabwe abroad.

While we are far away from the “victory” that Churchill was able to declare in his famous speech, this type of international acclaim is certainly a “new experience” for this country.

We must of course recognise that these recent gains are not accidental, nor are they the result of good fortune. Instead, they are the outcome of the deep-rooted, long-term reform agenda we began to undertake almost three years ago.

Working according to the Transitional Stabilisation Programme, a step-by-step roadmap for economic recovery, we have gone about systematically reforming the very foundations of the Zimbabwean economy. We set ambitious targets  too ambitious some claimed  and we met over 80 percent of them.

These included running a Budget surplus for the first time in modern Zimbabwean history, successfully floating our own currency and after some volatility, seeing it reach relative stability and supporting the increased supply of locally manufactured goods, rising to 45 percent on market shelves from just five percent in 2017.

For the first time in many years, exports exceeded imports, creating a balance of payments surplus.

When the reforms caused short-term uncertainty and upheaval, there were voices calling for us to shelve our agenda and return to how things were.

But we stood our ground, confident in our plan and guided by the President’s frequent citing of Margaret Thatcher’s famous statement during her own reform drive, “yes the medicine is harsh, but the patient requires it in order to live.”

This does not mean we are resting on our laurels. Far from it. The true benefits of these reforms are yet to be felt by the majority of the public, who still struggle. There is much, much more to do.

But what we can say definitively is that we are on the right track, and the world has begun to take note. We must stick to our principles, remain steadfast and disciplined, and keep going.

There will be bumps in the road, and we are still a long way from reaching our goals of a prosperous Zimbabwe for all. But I am confident that we have now reached the “end of the beginning” of our economic journey. And as long as we stay the course, we too will prevail.

Prof Mthuli Ncube is the Minister of Finance and Economic Development. Originally published in the Herald.

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