ZIMASSET - A DIFFERENT VIEW POINT

I have had brief time to peruse the ZimAsset Blueprint and wish to commend my comrades at home for putting together such a comprehensive document which is the fishing rod for the "Party" to exercise the mandate handed on the 31 July electoral victory. The document has been adopted by Cabinet and as such is now an implementation authority and guiding principle for the State machinery. 

I however need to make some observations which will only serve to make this document more strengthened by way of re-envisioning constructive criticism that will maybe form part of its monitoring and evaluation mechanism. The document lacks mention of the key role of the Diaspora in underwriting its successful implementation. At the recent Diaspora engagement meeting with Hon Minister Mzembi, Diaspora remittances were recognised as the biggest revenue input contributor to the Consolidated Revenue Fund, with remittances from Tourism being the second significant contributor. What this means is that a lot of work needs to be done to understand the nature and relevance of Diaspora remittances and how this feeds into the National Development plans.

How can the Diaspora investments be harnessed to contribute positively to building an income earning structure for the country as opposed to misdirected investment that is more consumptive in nature and hopefully explore a way of supporting Diaspora to invest in sustainable projects that promotes the govt's growth trajectory? According to previous studies, an estimated 67% of remittances to Zimbabwe are channelled through informal means. As the Diaspora, we stand ready to support the initiatives to lobby for the removal of US Sanctions, an albatross hindering the effective implementation of the ZimAsset strategic action plans to revive the economy.

Previous studies carried out have made recommendations for the establishment of a Diaspora Engagement and Institutional Support Framework to cement this strong bond. Due to deficiencies in official data on remittances, it is currently difficult to analyze the macroeconomic impact of remittances on growth and poverty reduction. The Institutional framework which can be done in conjunction with the UZ and Central Statics Office to improve on data collection and reporting systems on remittance flows might help to better understand the flow and impact of both formal and informal remittances. "Despite the lack of official statistics, migrant remittances are a major source of foreign currency as international balance of payments support has dried up. Various studies have established that remittances have helped the Zimbabwean economy to remain afloat despite the negative performance of all other economic sectors. With deliberate fiscal and monetary policies, remittances could be channelled towards local industry through lines of credit and thus help revive local production capacity. " 

With proper engagement that guarantees protection of investment and recourse to dispute resolutions, we can predict to see more investment being directed to key sectors of the economy. We have engaged the embassy to host a trade and investment conference on May 24-25, 2014 and these are part of broader issues which we are focused on under the auspices of the Zimbabwe Business Network (ZBN). Item 2.6 acknowledges that there was a significant flight of skills resulting of effects of the illegal sanctions and it fails to look further and appreciate that this is an opportunity to turn around this brain drain to a brain gain that can be used positively to redress economic performance. The country is fast becoming a dumping ground for Japanese vehicles due to lack of synergy with the Diaspora leading to unwise investment to hard earned incomes. If 2 million people in Diaspora all buy a Kombi, this means we will end up saddled with more cars than commuters and harnessing these resources can prove critical to the long term development of the nation. It may wise to tap into coordinated investments that helps drive the economy. 

The document appears to be more focused on the co-ordination of govt-centric activities and feel it should do more to encompass manufacturing and productive sector growth that is needed to kick start this ailing economy. Item 3.12 on sustainability of Agriculture, there is emphasis on the Presidential Inputs scheme to help farmers and to write-off as irrecoverable electricity debts US$80m, and while this is politically prudent, it is crippling the farmer work mentality to be efficient and productive to the extent of being self sufficient. This has seen the slackening of capacity land utilisation resulting in the productivity substitution in favour of contract farming deals. The overall effect is the dwindling the national strategic grain reserves precipitating reliance on foods imports. Item 7.12 on "Quick wins for the food security and nutrition cluster", states as its first priority, "To intensify collection of maize from Zambia and redistributing to needy provinces,” again while this acknowledge the required shortfall in production, this is pre-empting a national dependency culture.

Do we have proposals to mitigate these challenges in the long run? This trajectory is certainly not sustainable and came as no surprise when Zambia decided to cancel earlier this year, the standing grain import agreement, a development which extraordinary diplomacy manoeuvres to resuscitate the deal. (1) ( http://zimbabwe-president-robert-mugabe.rsspump.com/?key=20131027124849.crisis-zambia-cancels-maize-deal)  (2) http://www.thestandard.co.zw/2013/10/27/zambias-michael-sata-goes-back-maize-promise-mugabe/ As a result ZimAsset at review stage needs to reassure us that this situation is being seriously addressed, this is what will resonate with the people as they get empowered to be the masters of their own destiny.

The document has reassured us that the multi-currency regime will be maintained, but how is this sustainable in the long run without being a draw back to our own growth projections. The recent slump in the US$ against the rand has already started to distort trade with South Africa as the rand is now trading firmer meaning the rand is buying more goods and boosting trade balance in favour of South African Traders. The shortage of US$ notes in circulation is another unintended consequence of using the dollar and of cause the diplomatic farce it dangles with the "sanctions" debacle. There is need to quantify the value and effects of lost business opportunities resulting from lack of accessing the dollar in circulation. Most targets envisaged will be missed if there is no currency in circulation and this also kills the development of small and medium business enterprises. The closure of TN Harlequin resulting in the loss of more than 800 jobs is resulting from lack of demand in the market of its products and can be traced to lack of money circulation in the economy. The current liquidity problems which are constraining banks from lending can partly be addressed by instituting policies that encourage the transmission of remittances through formal means and hence availing remittance funds to financial institutions.

The document fails to fully address the effects of globalisation and how this are impacting on the way we do business on a day to day basis. The issue of introducing international business transaction systems such as PayPal, Pay point and BACs and how this money wire transfer can revolutionaries business in Zimbabwe and help address the challenges posed by the lack of US$ in circulation. The setting up of Special Economic Zones can benefit the economy if conducive instruments that make business flourish are in place and this also helps monitor capital flight and prevent fraud and externalisation of cash subject to tax as gross company earnings. ICT is at the hub of all this and the document is skating over this issue. We need a robust and strategic intent to transform business infrastructure that helps creates downstream industries and small traders which activates and rejuvenates the economy.

The issue of bringing in accountability in the govt thrust towards the management of natural resources needs re-emphasis because the GDP growth targets and projections are anchored on these not so finite resources. These resources need to form the nexus of economic transformation with clear safeguards from plunder. The strategic focus should look at the bigger picture, how these resources can transform the country's economic potential and change the outlook projected into the next 50 to 100 years. The 'Look East Policy' needs to look seriously at how the govt can bring in equipment for the beneficiation of natural resources ahead of sub-contracting foreign firms to assume overall control of these key scarce resources. Gold is Zimbabwe's most important mineral with about 600 registered gold mines across the country comprising about 30 large and medium sized producing an annual output of about 20 tons of gold, which ranks 3rd to South Africa and Ghana in the world top20. So it is of necessity to prioritise the beneficiation of gold internal to boost the market value of final products, boost local enterprise and create employment in highly skilled polishing capabilities.


 http://www.jaw-crushers.org/solutions/gold-mining-processing-equipment-zimbabwe.html

By exporting raw natural resource, we are technically transferring in excess of approximately 6 000 highly skilled jobs to India and parts of Asia in the diamond sector alone as well as the downstream demand for goods and services from this work force. Looking at other sectors such as steel and ore mining, this means we can technically rejuvenate the economy and create close to 40 000 jobs resulting in increased tax revenue involves and related demand boosting the economy.

To sum up my analysis, there is need forgovt to move out of its shell and engage more with its Diaspora constituency in a way that opens clear lines of communication to transform the way we do business and relate with the wider world. Some of the countries that have successfully engaged their Diaspora Nationals include the likes of the Philippines, India, Mexico, Bangladesh, Nigeria, Morocco, Kenya and Ghana. Lessons learnt indicate a positive correlation between reforms meant to facilitate Diaspora participation, and the actual participation of Diasporas in areas such as investment, remittances, etc. The reforms/policies not only contributed to the Diaspora maintaining social and psychological links with the homeland, but also served as vehicles for building mutual trust and promoting remittances and investments. The fight for the removal illegal sanctions needs to be intensified to free the country from tactics of modern day slavery camouflaged as restrictive measures. The world appears ready to re-engage Zimbabwe and we need to up our game and use the fishing rods at our disposal. 

Joshua Chigwangwa