Home » Governance » Convert Zim-Asset Into National Development Plan [opinion]

Government in October 2013 unveiled a five year economic blue print known as the Zimbabwe Agenda for Sustainable Socio-Economic Transformation (Zim-Asset).

Zim-Asset is a cluster based plan, reflecting the g need to fully exploit the internal relationships and linkages that exist between the various facets of the economy. These clusters are as follows:

Food Security and Nutrition

Social Services and Poverty Eradication

Infrastructure and Utilities and

Value Addition and Beneficiation.

During the plan period, the economy is projected to grow by an average of 7,3 percent and was expected to continue on an upward growth trajectory to 9,9 percent by 2018. This was based on the following assumptions:

Improved liquidity and access to credit by key sectors of the economy such as agriculture

Establishment of a Sovereign Wealth Fund

Improved revenue collection from key sectors of the economy such as mining

Increased investment in infrastructure such as energy and power development, roads, rail, aviation, telecommunication, water and sanitation, through acceleration in the implementation of Public Private Partnerships (PPPs) and other private sector driven initiatives

Increased Foreign Direct Investment (FDI)

Establishment of Special Economic Zones

Continued use of the multi-currency system

Effective implementation of value addition policies and strategies

Improved electricity and water supply.

Sadly, commodity prices, mostly agriculture and mineral commodity prices, edged lower in the recent months and are projected to continue on the downward trend in 2015.

Certainly, prospects for lower mineral commodity prices pose potential risk with regard to our export earnings from such minerals as gold and platinum.

This development is against the backdrop of weak domestic demand, tight liquidity conditions and the appreciation of the US dollar against the South African rand, the currency of our main trading partner. These combined forces have eroded the competitiveness of our economy hence the incessant company closures.

However, the economy grew by 6,2 percent and 3,4 percent in 2013 and 2014, respectively. Basing on depressed global prices on commodities and internal structural rigidities such as reduced agricultural supply due to drought, indications are that this year’s growth rate will be below 3 percent. These rates are far below the planned annual growth rate of 7,3 percent.

There are some notable results from the implementation of Zim-Asset particularly under the infrastructure and utilities, social services and poverty eradication and to some extent the value-addition and beneficiation clusters.

With respect to infrastructure and beneficiation cluster, we have witnessed positive outcomes in the areas of electricity generation — thanks to His Excellency,President Mugabe’s efforts in attracting bilateral investments which we witnessed under the Zim-China mega deals. There also significant strides which are made in roads and water rehabilitation around the country.

Just recently, we witnessed the launch of a staggering $250 million which was sourced from South Korea, India and Brazil for irrigation rehabilitation which will of course positively affect the food and nutrition cluster.

Within, the value-addition and beneficiation cluster, through the charismatic efforts of the Head of State and Government, President Mugabe, we have seen the $4 billion investment deal which is anticipated to employ over 8 000 people on completion. I can go on and on.

The main challenging aspect of the Zim-Asset is the aspect of time! Since independence, Zimbabwe has been traditionally coming up with five year plans. My humble submission is that the short time-frames for implementation have been the major drawback for Zimbabwe. We are much respected on drafting good policies but we fail on the implementation with one of the major causes in addition to lack of funding being time!

For the Zim-Asset, the assumptions or rather the necessary requirement for the achievement of Zim-Asset goals require a great deal of time of more than five years. For example:

The generation of electricity through the construction of new power station requires more than three years. We are already almost two years into the implementation of the national blueprint but the work on electricity generation is just starting. What it means, is that, taking into account that electricity is a necessary requirement as an inputcritical enabler for the implementation of Zim-Asset, its delay in availability means we will not achieve the goals set.

Liquidity and access to credit by key sectors of the economy such as agriculture is worsening. In order to improve the liquidity situation, we need to understand the sources of liquidity under a dollarised environment. In this case, the sources of liquidity are exports, foreign direct investments, aid, bilateral support and remittances. We can’t get aid immediately because of a US$10 billion debt overhang. The debt overhang situation also scares investors who are critical for exports generation. And, in the face of erosion of domestic competitiveness due to high cost of production and appreciation of the United States Dollar we can’t just export! It’s a vicious circle! To break it, we require time.

Decrease in Foreign Direct Investment (FDI). Generally, save for the China mega deals and other bilateral investments deals with Russia, South Korea, India and Brazil, the general flow of investments into the country which was supposed to be a stimulus for the Zim-Asset implementation has not improved! It therefore put us on a real challenge to achieve the goals. Even in cases where we have locked in investments deals as in Russia’s case, the full operation up to the refinery, we have to wait up to 2024 which will be well after Zim-Asset time-frame.

Development and review appropriate legislation, regulations guidelines and policies. The review of policies is necessary requirements in the interest of improving the business environment if we are attracting FDIs. This in itself requires a great deal of time as more dialogue is required in building consensus.

Improved linkages among higher and tertiary education, research institutions, industries and government as well as production of more than 200 postgraduates and doctoral graduates from Universities. In order to have his goal achieved, we need enough PhD supervisors in the first instance which is not the case. To make matters worse, a PhD under the normal circumstance takes more than four years yet these are the same people who must contribute to Zim-Asset through research and development.

Establishment of institutions for integration of smallholder farmers into the domestic, regional and international agricultural commodity markets is required. This is still to take place and in some cases where the decision has been taken and the institutional framework has been launched as in the case of the Commodity Exchange which was launched in February 2011but up to now has not seen the light of life. This all requires time.

Slow implementation of value addition policies and strategies

Worsening electricity and water supply.

The most worrying feature is that most people, who supposed to implement the policy, that is, civil servants, private sector, development partners, labour, civil society and academia, doesn’t have full knowledge about the blueprint.

As we make strides in the implementation of this great blueprint, it is my humble submission that we must make the Zim-Asset a National Development Plan Vision 2030 with five year target intervals.

The importance of setting the Zim-Asset as a National Development Plan time framed for the year 2030 is that it brings certainty especially on the continued use of the US dollar. So far, investors are assured continued use of the US dollar up to 2018 and thereafter there is no clarity from the policy position although from the economic outlook it is clear that we will continue to use the multiple currencies as long as we don’t have foreign exchange reserves.

If we adopt this strategy, we need then to move quickly to the development of the national communication strategy and implementation matrices which very tools which can be used to bring everyone on board and the milestones set are measured and where results are lagging corrective actions are taken.

Dr Mugano is an Economic Aisor, Trade and Competitiveness Expert, Research Associate at Nelson Mandela Metropolitan University (SA) and Visiting Lecturer at Zimbabwe Ezekiel Guti University.

Source : The Herald