Biti should get his act right this time

Finance Minister Tendai Biti should keep his word and scrap the vote of credit in his 2011 budget because donors are not interested in Zimbabwe’s recovery.  It would even be better to budget for a deficit as long as the expenditure is on infrastructure and not consumption.

Biti provided for $810 million under the vote of credit in this year’s budget but by mid-year he had got only $207 million, almost a quarter of what he thought he would get. He recently admitted in Gweru that it was wishful thinking that donors could bail out the country.

“Now we have seriously learnt hard lessons. If anyone suggests that a third of the budget should be from donors, I will not do that.  If money came from donors, then Father Christmas, hallelujah, thank you! But putting it in the budget I am not going to do that,” Biti was quoted as saying.

Donors had promised to pump in as much as $10 billion if the Movement for Democratic Change or Mavambo came to power but they are now insisting on the full implementation of the Global Political Agreement before they can bail out the country.

This has prompted a Zimbabwean economist living in Europe to say Zimbabwe’s politicians must learn that they are on their own. Donors are not interested in developing Africa, but their own interests.  “If they had been interested in developing the continent, Africa would have long been developed by now,” he argued.

The same view is supported by Zambian economist Dambisa Moyo who has worked for key developmental institutions like the World Bank. She says in her book: Dead Aid: “Aid engenders laziness on the part of the African policymakers.”

“The net result of aid-dependency,” she argues, “is that instead of having a functioning Africa, managed by Africans, for Africa, what is left is one where outsiders attempt to map its destiny and call the shots.”

Moyo says one of the most depressing things is that donors, policymakers, governments, academics, economists and development specialists all know that aid does not work.  She even says the chief economist of the British Department of Trade and Industry remarked that “they know it’s crap, but it sells the T-shirts.”

Zimbabwe’s politicians continue to look forward to receiving aid when Moyo says: “The problem is that aid is not benign- it’s malignant. No longer part of the potential solution, it’s part of the problem – in fact aid is the problem.”

Biti will have a formidable task made even more difficult by the prospect that he might not see his budget through because of the pending elections - if they are held- but he should put the country first and politics aside.

There has been pressure from those opposed to the government of national unity to portray the image that the country is not moving forward. The situation could get even worse with calls for elections from both ZANU-PF and MDC leaders. Some sections of the media have already started reporting about “pre-election violence”.

So far, all the signs are that Zimbabwe is on the right path. The progress might be slow but at least the country is going in the right direction. But the trend in the second quarter of the year which saw the country importing more than it exported should be carefully looked into unless the country was importing capital goods to boost production.

As the government’s treasurer, Biti should also convince his colleagues, both in the MDC and ZANU-PF that talk about elections is retrogressive. Besides, there is no money for elections. Period!

Industry and Commerce Minister Welshman Ncube aptly summed it all when he said elections were not the answer to the country political and economic woes. Political leaders acknowledged this when they signed the GPA that elections were divisive.

Ncube said it was now time for the country’s political leaders to think about the country than about who could score more points.  “The difficult we have is that we have political gladiators understandably who are more preoccupied with proving to the nation who has less fear for the elections than the other.

“They have all these macho-mentality when all objective indicators show that it’s not in the national interest to talk about election or even talk about it when you have not even completed the constitution making process.

“Any election called by Mugabe in anger cannot be anything other than a ZANU-PF victory. It will take us back to June 2008. I don’t understand why some people think they will agree with Mugabe on a big thing like elections when they can’t agree on small things like the appointment of the Reserve Bank of Zimbabwe governor,” Ncube said.

Calls for elections could see a lot of money coming into the country but for all the wrong reasons. Money that will pour into the country will be for opposing the draft constitution or for so-called voter education and election monitoring.  While this is very important it is not a priority.

The history of Zimbabwe over the past 30 years shows that elections do not bring about democracy because Zimbabwe has held elections on time every five years since independence. Studies have, however, shown that an improved economy can bring about democracy.

Dambisa Moyo argues: “The Western mindset erroneously equates a political system of multi-party with high quality institutions (for example, effective rule of law, respected property rights and an independent judiciary etc.). But the two are not synonymous……….What is clear is that democracy is not the prerequisite for economic growth that aid proponents maintain. On the contrary, it is economic growth that is a prerequisite for democracy; and the one thing economic growth does not need is aid.”

Zimbabwe’s economic recovery is not far off. The Africa editor of the Economist, Xan Smiley, said in September Zimbabwe’s economy would recover in two years and Zimbabwe would be one of the most successful countries on the continent in 10 years.  Is it not worthy it to wait for just another two years, stop politicking and build the country’s economy?

The priority should be to get the country back on its feet first, get people to earn good salaries and elections can then come because people with full stomachs can make informed choices while those with empty stomachs tend to go for whoever promises them food even if that person is making wild promises.

Zimbabwe’s priority should be to bring back power to the country so that this can propel the agricultural, mining and industrial recovery that the country badly needs. The situation seems to be pathetic.  Biti said in his review for the second quarter released last month that capacity utilisation in industry is still between 35 and 50percent.

The major reason was that five of the six generators at the Hwange Thermal Power Station were not working resulting in output of only 150megawatts instead of over 600 megawatts.

Bit should also investigate his own ministry because it is not collecting the revenue it is supposed to. According to his report, 35 percent of the revenue was from Value Added Tax.  This tax is paid by businesses without any effort from the government apart from taking what is surrendered by the businesses.

The second biggest source of revenue was Pay as You Earn, another source where government does not play a part except receiving what employers have deducted from their workers.

Customs duties which his employees should collect only contributed 13.2 percent of the revenue. This should ring alarm bells for Biti because “official” imports totalled $458.4 million against exports of $364.9 million.  Unofficial exports could be even higher considering the congestion at the country’s border posts.

Biti also admitted that the revenue collected was below target.  Corruption at the country’s borders is rife with customs officials getting loads of money in bribes, something anyone can witness if one visits the country’s borders as a traveller.

 

See also: Zimbabwe is better off postponing elections

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