Zimbabwe: The road to recovery

The Zimbabwean coalition government is faced with a big challenge to reverse the economic failure which was a result of many years of bad governance full of mismanagement. The country is suffering from an awful cocktail of high unemployment, slow growth, high inflation, rampant corruption, very low agricultural, manufacturing and mining activities, a germ-infested water supply system, constant elecricity black-outs and brown-outs, telecommunication systems with a lot of downtime, a non-functioning health delivery system, an unreliable transport system with pot-holed roads, daily derailment of trains and sub-standard service in the country's airlines. The coalition government which is now in place in Zimbabwe should now focus on how to transform this chaotic economy into a vibrant economy. Economic changes that position Zimbabwe for positive future growth and poverty reduction with a macroeconomic policy that encourages foreign direct investment and economic diversification should be put in place as soon as possible.

The coalition government's plans for development in the country should put the rescucitation of the water supply system and the reopening of hospitals and schools on top priority. Most water pipes and sewage pipes in the country are broken and oozing water and sewage all over the city, towns and residential areas and so these need to be repaired or replaced as soon as possible. Chemicals to purify the germ-infested water supply system should be sourced and bought in bulk. This should be given top priority so that cholera can be eliminated completely and the deaths from cholera can stop. The country has an abudance of rivers and fresh water lakes so serious lack of water in Zimbabwe should be unheard of but it is heard of because the problem lies in the inefficient production and distribution systems of the water supply authority in the country. Substantial investment is needed to rehabilitate and expand the water supply systems in all of Zimbabwe's water supply systems , while water production and delivery capacity will have to be increased by more than 400% to meet a projected growth in demand when the economy booms. The development of new water production facilities which can also be used for electricity generation should be part of the water supply development plan. Rural water supply systems also need to be rehabilitated. A large proportion of the rural water supply system is not functioning at all or is not functioning properly but can be reconstructed and repaired. The impact of a major rehabilitation effort aimed at rural water supply systems would yield substantial economic benefits in terms of increased agricultural production and improved living conditions.
A complete revamp of the health delivery system needs to be done with emphasis being given to the supply of medicine and all resources needed to provide an efficient health delivery system as well as the competitive remuneration of all hospital staff so that they are motivated to offer excellent care to patients. This should be given top priority so that when the hospitals re-open they will be regarded as places where the sick can be healed and not as morgues to store the dead as had become the case prior to their closing.
The coalition government also needs to appreciate the value of teachers to the development of future generations who are going to carry on the country's legacy when the adults of this generation have all gone senile or died. It should give them salaries that show that appreciation. Contrary to what some blogger reported, the teachers are happy with the US$100 as a temporary measure for now and are in schools teaching earnestly but they are hoping that that is not the full amount of their salary considering that US$100 is the amount of money that most primary schools charged as school levy per child this term. If a teacher teaches a classs of 40 pupils where each pupil has paid a school levy of US$100 for a school term of three months and is then paid only US$300 for teaching 40 pupils for three months then don't you think it would be better for the teacher to make arrangements with three parents of pupils to teach only those three pupils at his/her home for three months and have their parents take turns to pay him/her US$100 each month. This would be less workload for the same amount of money and a big advantage to the three children, because they are few they will be given maximum attention in mitigating their educational weaknesses. My appeal to the coalition government is not to give the teachers a chance to think along those lines by giving them competitive salaries because failure to do so would further destroy the education system.

Next development priority should be given to the agricultural sector so that hunger in the country can be eliminated. Agriculture dominates the Zimbabwean economy although its share of GDP declined steadily ever since the farm invasions. Agricultural transformation for Zimbabwe is imperative and for this reason the coalition government needs to improve the agricultural sector so that it is competitive. Order in the agricultural sector should be restored and the new farmers should be provided with capital and agricultural inputs (on loan of course) so as to revive effective agriculture in the country. Effective agriculture can be realised and agriculture expanded on condition that real progress is made with regard to the following issues:
i) Seed and fertiliser production should be increased or should I say revived so that it is readily available to anyone who needs it and the price of the seeds and fertilisers should be made affordable not only to large scale farmers but also to small scale farmers. Inadequate seed and fertiliser availability as well as unsatisfactory seed quality combined with seed exhaustion are some of the problems that have been causing low agricultural production.
ii) The lack of modern agricultural practices results in wastage of both the agricultural inputs and outputs and poor quality of the outputs and so it is essential that the coalition government makes plans to ensure that technical knowledge in farming, harvesting, handling, transportation and storage practices is imparted to all the farmers. Dry storage facilities and cold storage facilities should be enforced to be properly maintained or installed on the farms.
iii) The water supply on most farms is in very poor condition and dams and irrigation systems have to be built at the farms so as to ensure agricultural outputs even during drought spells. Electricity should be installed on the farms as well, because lack of electricity and enough water on the farms is a major deterrent to prospective investors in agro-industrial enterprises.
iv) Transport of agricultural products from the farms to the different markets be it by road, rail or air should be made efficient. Particular attention should be given to upgrading roads from farms to markets because the poor conditions of some of the roads often results in product damage and the late arrival of produce at markets. When exporting the farm produce by road, the delays at customs and excise posts during the transport of export products provide a serious obstacle. Air cargo space needs to be improved in respect of the availability of air cargo flights, air cargo capacity and the cost thereof.
V) Marketing of the agricultural products in world markets should be done by an agricultural corporation like ARDA which should also be responsible for helping farmers to obtain the capital they need. The farmers definately need capital for investment in irrigation, agricultural machinery, storage facilities, start-up losses and transport for carrying stocks.
The type of investments that are needed in the agricultural sector are those that will make use of Zimbabwe's raw materials and natural resources and process them into higher value goods. I am talking about agro-processing like canning or the manufacture of value-added products. This moving up the value chain is essential and ensures prices that are not dependent on variable factors like is the case with raw farm produce.

Next development priority should be given to the country's transport, power and manufacturing sectors. The current state of Zimbabwe's road infrastructure with potholes all over the roads can be an impediment to attracting foreign direct investment. The country is in dire need of infrastructural investment to upgrade and develop roads, rails and airlines.
The power infrastructure run by the Zimbabwe Electricity Supply Authority (ZESA) is under-resourced and therefore inefficient and the distribution system is in need of rehabilitation. The long periods of power black-outs and brown-outs every single day is a serious obstacle to economic activity. The frequent power cuts not only disrupt business operations but also increase the cost of doing business. A recovery of the power sector especially with regards to distribution is urgently required. The demand for electricity in Zimbabwe is substantially higher than can be supplied domestically and the resultant shortfall has to be imported from neighboring countries. The electricity supply available from both domestic and imported sources is currently at its limits and this deficiency has severe macro-economic implications. The importation of electricity and fossil fuels consumes valuable foreign exchange and has a negative effect on the balance of payments. It is therefore advisable that the development of an electricity generation project be one of the many things the coalition government aims to do. The coalition government also needs to draft a new energy policy which aims to attract new private investment. Tax concessions and other incentives should be offered for investment in hydro-electricity and the utilisation of Zimbabwe's rich geo-thermal resources.
Zimbabwe's manufacturing sector used to be very high and vibrant but is now very low and the managers in the manufacturing industry have been citing shortage of foreign currency to buy raw materials and to service machinery as the reason for low production. So the coalition government needs to allocate manufacturing industries the foreign currency that they need for them to increase production to high levels. The coalition government should also come to an understanding with the manufacturing industries, the wholesalers and the retailers that they should price their goods with a reasonable profit margin that does not exploit consumers and their failure to do so would make the coalition government invite foreign companies to come and flood the market with cheaper priced goods that will make them go out of business. It's about time that Zimbabwean businesses are made aware that business is not only about making profits, it is about making profits with corporate social responsibility in mind and being the first to be considered among many other factors.

When the above mentioned development issues have been dealt with the coalition government should then concentrate on developing a strategy to promote economic diversification and attract foreign direct investment. Economic reforms that encourage local investment and FDI into Zimbabwe needs to be implemented. An economic policy thet protects investment and is favourable towards the enforcement of property rights, the relaxation of capital controls and the provision of incentives has to be put in place. The macroeconomic policy that should be implemented should focus on developing a more efficient tax system, accelerating effective divestiture from public enterprises and increasing investment in human capital especially in the areas of education and health services. Zimbabwe also needs a strong financial system with more effective regulation and supervision of the banking system. The coalition government could also consider building up a bond market, offering low-risk investment opportunities for institutional investors worldwide. The coalition government should commit itself to making the private sector an engine of Zimbabwe's growth by pursuing investor friendly policy reforms . With that aim in mind an advisory body of national and international corporate leaders that advise the President and Prime Minister on issues that can enhance the business operating conditions in the country to attract new investors into potential growth sectors and transform Zimbabwe's economy should be set up.

That, dear readers is my own opinion aboout how Zimbabwe can travel the road to recovery. Let me conclude this article by appealing to all potential donors to put aside their mistrust of Mugabe and his Zanu PF party members and help the coalition government with funding that will make it possible for it to carry out all the projects needed for the complete recovery of this dying nation. With donor funding the road to recovery will not be bumpy and it will help the nation to set up sustainable development projects that will enable it to stop depending on donor funding most of the time. To Zimbabweans I would like to say that we have a long way to go but if we work together in harmony like bees we will achieve our goal in no time and the final results will be as sweet as honey.