Causes of Zim economic dysfunction

Moses Tshimukeni Mahlangu

TOP causes of the country’s non functioning economy arise from the political front. A mismatch between policies and execution of the same policies is another.

Policy inconsistencies are glaring. At one time government policy favours capitalism and socialism at another. This chameleon strategy is self defeating.

In terms of the Labour Act, Chapter 28:01, which is the parent Law in labour matters, employers and employees are entitled to collectively bargain, for not only salaries but other conditions of service.

On the contrary, Finance minister Patrick Chinamasa and the Reserve Bank of Zimbabwe (RBZ) governor John Mangudya went full blast to tell the citizenry that in 2015 salary increments would be frozen.

Such announcements have a two-fold impact, namely, giving ammunition to employers or resulting in concessionary bargaining set-up as workers would be at the mercy of employers.

Minister Chinamasa is his budget speech presented to Parliament on November 27 2014, ascribed the need to raise tax-free threshold from $250 to $300, as an attempt to release disposable income into purchasing goods and services.

After this clear admission, the same ministry as supported by the RBZ governor purportedly announced a salary freeze.

In the government’s view, expensive labour and stringent labour laws are the major drivers of high production costs and prices.

Taking government employment cost into consideration, of the $4,1 billion budget for 2015, 82% goes to employment costs.

There is need to unpack the said employment costs, for example does this figure include secret services whose expenditure is uncontrolled, the issue of ghost workers whose existence the Finance minister denies and such other shadow expenditure?

While civil service salaries are low, the same is not true of the numbers of civil servants, whose figure is hazarded to be around 553 000. Re-engagement with private sector, domestic and international investors has become an academic, if not a futile exercise.

On one hand you go out with a begging bowl, on the other you enforce indigenisation with 51% shares for locals, you vow that all land in white hands must be expropriated. These are the inconsistencies that rob this country of potential economic growth.

Questions that jump to the fore: Does the majority of citizens benefit from the indigenisation policy or a few well-placed individuals? Who benefited most from the cancellation of local authorities debts and Zesa arrears?

Equally, who will benefit from the ongoing tax reliefs? If the government spends 82% of its income on employment costs, where is the logic of directing local authorities to spend 30% on salaries and 70% on service delivery?

On cancellation of debts, the most deserving category of citizens were those with hospital huge bills. A close analysis of the strategy reveals that debt reliefs were targeted for able voters, the bedridden were not relevant at that juncture.

Business-friendly environment, flexible labour laws and productivity-linked wages are buzz phrases of the day. Efforts made by former Labour ministers the likes of the late Kumbirai Kangai and John Landa Nkomo have gone down the drain.

A reversal of colonial Master and Servant Act of 1934 is being fiercely attacked by the government of the day. Cheap labour is being touted as a virtue, maybe because our former liberators have become employers.

One hand gives in the form of a raised tax threshold, while on the other tollgates and pay as you earn and a myriad of other thumb-sucked taxes take everything from poor and defenceless citizen.

Commentators on Chinamasa’s 2015 budget made interesting observations, the RBZ governor, calls it a very good and developmental budget. Chris Mutsvangwa, a war veteran, applauds the budget for its ability to attract foreign capital.

Munyaradzi Kereke at least is realistic in calling for the tightening of belts. Experience has taught that belt tightening is for the less privileged and not for privileged ones. It is at times difficult to understand Tendai Biti.

At one time he argued: “I can’t squeeze water out of a stone,” meaning, when money was not available, there was nothing that he could do. While this was a correct reading of the fiscus, it was viewed as demeaning to workers, as this was said in response to civil servants demonstration for an increment.

Nelson Chamisa summed it all: “The economy is insolvent.” This is in tandem with the Finance minister’s allusion that the economy was in a sad and sorry state.

Possible ways out of this quagmire would be:
Take responsibility for both good and bad decisions,

Develop and implement time honoured and disinterested policies,

Work on the mismatch between policies and application on the ground,

Work on being consistent in all weather.

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