CANADA - TORONTO - The Global economic crisis has exposed the limitations of what the IMF and World Bank can do in times of real financial crisis.
The impact is such that any emerging economy in real need for economic assistance and revival has to re-think where it gets its funding and advice from.
The old adage that don’t mis-manage your economy to the point that the IMF and World Bank gets involved brings a whole new meaning to the chaos and crisis of today.
There have been various calls for reform of these institutions with China and the petro-dollar reach nations expected to bank roll the new monster institutions.
There are clear lessons and guiding trends for Zimbabwe and Africa in all this.
The most important lesson remains that don’t mis-manage your economy to the point that IMF and World Bank become your financial doctors.
Trends indicate that after decades of various economic structural programmes most African nations including Zimbabwe find themselves several steps back.
Whilst corruption and other faults maybe to blame it remains a challenge to identify a true success story in Africa driven by IMF and World Bank policies.
The success of any economic policy depends on a national “buy-in” of the policy. It can’t be imposed policy and expected to work miracles.
Policy must be developed with the Zimbabwe situation and circumstances in mind.
Zimbabwe is undergoing a very sensitive transitional phase both economically and politically.
A lot of hope has been placed resumption of donor aid, IMF, World Bank and other donors or sources of grant funds to finance the revival of the Zimbabwe Economy. This hope and anticipation may as well be misplaced.
The IMF and its related organizations have serious capacity issues now and are pre-occupied and re-inventing themselves to remain relevant in the age where they have come short and the Western Capital system has been forced to rely on Communist China to buy US Treasury bonds.
Sovereign Wealth Funds have demonstrated how they have replaced the World Bank and IMF as the lenders of last resort by bailing out some of the most respected Financial Institutions and playing a leading role in maintaining liquidity in the Global financial markets. Maybe Zimbabwe could change its focus from look “east” to “look Sovereign Wealth Funds”
The IMF and World Bank play a critical role is credit rating of nations and help create conducive business environment by their mere presence.
Beyond that the nation involved has to do all the hard lifting and the groundwork to create a solid economy. In short the recipient nation must have its own action plan, agenda and clear national course of direction.
An economy cannot recover just from Donors or from Aid. The donors and Aid can assist to avoid mass starvation and deaths but beyond that it’s not their purpose or responsibility.
Donor Agencies are designed to help the Economy of the Donating nation in as much as it may assist the recipient nation.
The key to a sound economic policy is drafting a economic national vision which takes into account the nation’s key resource - human capital.
Human capital plays such a central role that many nations which don’t possess any meaningful natural resources have managed to develop and dominate the world just because their human capital was properly harnessed and focused on achieving national economic independence and prosperity.
Zimbabwe due to the dramatic economic meltdown of the last 10 years has lost significant levels of human capital. In crafting a new National Economic vision there is need to identify where this human capital is and what or how much it will take to attract or re-attract this capital.
It is this human capital which will then help develop the necessary policies that can liberate Zimbabwe from donors, aid and any other forms of begging when the nation could easily be a Donor itself rather than a recipient.
Saturday, March 21, 2009
Zimbabwe in need of an Economic blue print.
During political and economic crisis such as the one being experienced by Zimbabwe normally political developments get all the attention at the expense of everything else. There is talk of a new constitution and fresh elections in 24 months.
How ever there is no talk of an economic recovery conference or an economic recovery programme developed with the input of all stake holders. Zimbabwe needs a home grown economic recovery blue print that will guide not just the recovery of the economy but that will also act as the road map for greater economic prosperity.
The current main political players have divergent economic policies and are unlikely to admit failure or any inadequacy in their plans. Already there is conflict over the validity of the current Monetary Policy and the recently announced budget by the then acting Minister of Finance Senator Patrick Chinamasa. The disagreements indicate deep-rooted mistrust of each others policy and ideology. This will scuttle any hope of quick economic recovery.
The way around this is to have an all-stakeholder Economic recovery conference which will include Non Governmental Organizations, business leaders, Bankers, Donors, SADC and many others who can contribute towards mapping out an effective recovery plan and mobilize the human and financial resources required.
The importance of an Economic recovery conference is clear as it allows every stakeholder to take ownership and accept what role they can play in rebuilding Zimbabwe. Any policy developed in isolation and in private is likely to be resisted and resented which will result in a pro-longed economic meltdown.
The traditional Donors are currently overstretched and likely to use every excuse to delay provision of any assistance which Zimbabwe desperately needs. The key to this is to make this process less of a political development and more of a national economic effort beyond the political conflict. The hosting of an Economic recovery conference can assist in un-blocking lines of credit which can assist Zimbabwean banks and companies. There is need to send a clear signal to the international investment community that Zimbabwe needs investors and its ready to welcome them.
The recent trend of haphazard and piecemeal approaches to donors and regional bodies will create a long run problem for the nation and future generations. The process has to be transparent and inclusive in allowing new ideas ,networks and approaches to be used to ensure that the current efforts properly fit into any long term Economic blue print.
Whilst the current Government has a limited mandate which is meant to reduce suffering and assist in stabilizing the Economy it must lay down a clear foundation of how the Zimbabwe economy will be grown and expanded. There is need to identify the key personnel and economic areas which can drive an economy. It is currently unclear if Zimbabwe Economy will be driven by mining, agriculture, tourism, manufacturing or any other sector.
It is important that such sectors be identified and a clear action plan be put in motion .This process is critical in stabilizing the economy as it can attract investors ,increase production and create new desperately needed jobs. The multiplier effect of this is that the Government coffers can start to receive revenue in form of income and corporate taxes in addition to royalties from mining houses.
So whilst politicians get used to their new offices and their newly acquired status the Economic recovery plan has to be quickly devised beyond political lines. Whilst the Government of National Unity is a temporary stop gap measure the Economic blue print is more permanent in nature and as such it requires national and international input
How ever there is no talk of an economic recovery conference or an economic recovery programme developed with the input of all stake holders. Zimbabwe needs a home grown economic recovery blue print that will guide not just the recovery of the economy but that will also act as the road map for greater economic prosperity.
The current main political players have divergent economic policies and are unlikely to admit failure or any inadequacy in their plans. Already there is conflict over the validity of the current Monetary Policy and the recently announced budget by the then acting Minister of Finance Senator Patrick Chinamasa. The disagreements indicate deep-rooted mistrust of each others policy and ideology. This will scuttle any hope of quick economic recovery.
The way around this is to have an all-stakeholder Economic recovery conference which will include Non Governmental Organizations, business leaders, Bankers, Donors, SADC and many others who can contribute towards mapping out an effective recovery plan and mobilize the human and financial resources required.
The importance of an Economic recovery conference is clear as it allows every stakeholder to take ownership and accept what role they can play in rebuilding Zimbabwe. Any policy developed in isolation and in private is likely to be resisted and resented which will result in a pro-longed economic meltdown.
The traditional Donors are currently overstretched and likely to use every excuse to delay provision of any assistance which Zimbabwe desperately needs. The key to this is to make this process less of a political development and more of a national economic effort beyond the political conflict. The hosting of an Economic recovery conference can assist in un-blocking lines of credit which can assist Zimbabwean banks and companies. There is need to send a clear signal to the international investment community that Zimbabwe needs investors and its ready to welcome them.
The recent trend of haphazard and piecemeal approaches to donors and regional bodies will create a long run problem for the nation and future generations. The process has to be transparent and inclusive in allowing new ideas ,networks and approaches to be used to ensure that the current efforts properly fit into any long term Economic blue print.
Whilst the current Government has a limited mandate which is meant to reduce suffering and assist in stabilizing the Economy it must lay down a clear foundation of how the Zimbabwe economy will be grown and expanded. There is need to identify the key personnel and economic areas which can drive an economy. It is currently unclear if Zimbabwe Economy will be driven by mining, agriculture, tourism, manufacturing or any other sector.
It is important that such sectors be identified and a clear action plan be put in motion .This process is critical in stabilizing the economy as it can attract investors ,increase production and create new desperately needed jobs. The multiplier effect of this is that the Government coffers can start to receive revenue in form of income and corporate taxes in addition to royalties from mining houses.
So whilst politicians get used to their new offices and their newly acquired status the Economic recovery plan has to be quickly devised beyond political lines. Whilst the Government of National Unity is a temporary stop gap measure the Economic blue print is more permanent in nature and as such it requires national and international input
Zimbabwe's GNU need to see beyond personalities
It appears my recent articles about the GNU have been misunderstood by many and deliberately distorted by others. As a Zimbabwean I am ready to accept whatever settlement that will end the suffering of fellow Zimbabweans. I am happy that finally there is light at the end of the tunnel .My hope and dream is to see that day when Zimbabwe can compete with other nations such as Japan, South Korea ,Germany and other nations that have risen from ashes to become economic powerhouses. However in our happiness we must always be alert and avoid falling into the same trap that led to ruinous policies all because as a nation we invested in personalities and not proper institutions.
This is a time to rebuild the country and rebuilding includes highlighting where Zimbabwe was going wrong .An example is the Roy Bennett case. Most people agree the law must take its course and there shouldn’t be double standards and selective application of the law.
It is widely reported in the media that the Zimbabwe Police has been instructed to stop all investigations for political violence and murders of early 2008. So naturally the question is if murderers can be forgiven and investigations stopped why cant the investigation of Roy Bennett be stopped ?Can you just imagine if in 1980, after signing the Lancaster House agreement, and after elections and at forming of cabinet stage, if General Peter Walls had arrested any of the returning comrades (including Mugabe ,Mutasa , Tekere etc) for alleged crimes committed against the Smith Government during the struggle??
Why cant Roy Bennett, Jestina Mukoko ,Gandhi Mudzingwa and others just be released with out further negotiations or arm-twisting. Is that asking for too much if you are in a “Unity” Government .
Roy Bennett could be tried whilst on bail on the understanding he is a senior government official who has returned voluntarily from exile. If he is to run away from being a senior government official then one should automatically wonder what is wrong with that Government.
The state has been investigating Mr Bennett for more than 3 years. As such one would expect there is no need to hold him a day longer without proceeding to trial. In short the state has had enough time to compile and document its evidence as such holding him in remand especially given Zimbabwe’s Prison conditions may be a way to adminster an extra- judicial death sentence merely by exposure to disease and other life threatening conditions endured in Zimbabwean jails and detention facilities.
The whole idea of a GNU is noble ,but we still have to assess its intention in the current set-up and the beneficiary of such a policy. Mr Mugabe was the biggest beneficiary of the GNU .Election loser rewarded with the Presidency . Life Presidency I may add. And yet Mr Mugabe has refused to give up leadership of his own party , on the basis that his party is too weak and too divided to tackle the opposition. And now we have just been told Mr Mugabe is not the problem?
A look at the Executive Presidency shows a scary trend. Those around Mr Mugabe in the 1980s devised the Executive Presidency on the hope that when Mugabe leaves they would enherit such supreme and total powers. Led by the late Eddison Zvobgo and assisted by some of the current mafia crop calling itself legal fundis Mr Mugabe was given more powers than a King would normally have. And all these Legal whiz-kids believed Mr Mugabe would leave soon and they will enherit the same powers. That was 22 years ago. And now we have the same mafia crew devising some scheme in the name of saving the people and molesting the constitution to accommodate Mr Mugabe
As indicated in my earlier article a Unity Government was still possible without Mr Mugabe as the (Life) President. Mr Mugabe has held his people at ransom just to remain in power .All the killings, murders, torture, rape, detentions ,abductions were done to allow Mr Mugabe to remain President. And the GNU as currently constituted only served to legitimize his quest for Life Presidency.
The issue at stake is the respect of the Constitution of the country. The idea that the constitution can be amended to suit an individual to remain in office is not just acceptable. If Zimbabwe is to join progressive nations like the ones above there is need to develop a culture of respecting the constitution as a guiding tool leading to a stronger and independent nation. The President must up-hold the Constitution and not undermine as we have witnessed under Mr Mugabe .
Mr Mugabe has ruthlessly amended the constitution several times just to remain in office. And as a direct result Zimbabwe is now a colony again. Zimbabwe is basically on life support and begging South Africa and other nations all because one man decided to die in office of President. Zimbabwe no longer has a credible currency or central Bank. If then we are going to correct this situation is it not a basic requirement that the man who presided over this must repent? He must retire and get some rest, spend time with his family.
At the centre of this crisis is how Mr Mugabe’s personality has been allowed to over shadow institutions including even his own party. An individual should not be allowed to be more powerful than his own party or institution he leads . In the USA the Clinton Family is very powerful ,but had to give way to Barrack Obama to lead the Democratic Party .This was so because the people said so. Mr Mugabe despite being Zimbabwe’s founding President he has not found any suitably qualified “Revolutionary” in his party to carry on the struggle on behalf of the party. The Clintons tried to plead with the people that they were the true custodians of democratic values in the same way Mr Mugabe claims to be the only and true custodian of the Revolution .
So at party level there is an institutional problem whereby the party cant replace its leaders in a timely and democratic manner. And the problem migrates from the party to the whole nation.
It is clear Mr Mugabe feels since his two vice-Presidents ( Muzenda and Nkomo) died whilst in office the same should happen to him. The only problem is that his party members and others are taking notes of these tricks and tactics . If not checked and condemned this could become an acceptable “Zimbabwean” way of doing things.
Zimbabwe requires high levels of donor aid and foreign direct investment to reach its potential. However for this to fully materialize there is need for the country to conform to internationally recognized standards of doing things. Zimbabwe has to earn the confidence of the international community and arresting a deputy minister designate ahead of swearing in is hardly the sign to show seriousness or evidence that there is “Unity”
The criticism of the GNU mechanics and implementation must not be mis-interpreted as calling for continued suffering of the people. The move is welcome in as far as it helps the nation heal and recover. However in as far as it serves to clandestinely convert the Republic of Zimbabwe into a monarch headed by King Mugabe Zimbabweans must be at liberty to expose that.
Gilbert Muponda is can be contacted at gilbert@gmricapital.com
This is a time to rebuild the country and rebuilding includes highlighting where Zimbabwe was going wrong .An example is the Roy Bennett case. Most people agree the law must take its course and there shouldn’t be double standards and selective application of the law.
It is widely reported in the media that the Zimbabwe Police has been instructed to stop all investigations for political violence and murders of early 2008. So naturally the question is if murderers can be forgiven and investigations stopped why cant the investigation of Roy Bennett be stopped ?Can you just imagine if in 1980, after signing the Lancaster House agreement, and after elections and at forming of cabinet stage, if General Peter Walls had arrested any of the returning comrades (including Mugabe ,Mutasa , Tekere etc) for alleged crimes committed against the Smith Government during the struggle??
Why cant Roy Bennett, Jestina Mukoko ,Gandhi Mudzingwa and others just be released with out further negotiations or arm-twisting. Is that asking for too much if you are in a “Unity” Government .
Roy Bennett could be tried whilst on bail on the understanding he is a senior government official who has returned voluntarily from exile. If he is to run away from being a senior government official then one should automatically wonder what is wrong with that Government.
The state has been investigating Mr Bennett for more than 3 years. As such one would expect there is no need to hold him a day longer without proceeding to trial. In short the state has had enough time to compile and document its evidence as such holding him in remand especially given Zimbabwe’s Prison conditions may be a way to adminster an extra- judicial death sentence merely by exposure to disease and other life threatening conditions endured in Zimbabwean jails and detention facilities.
The whole idea of a GNU is noble ,but we still have to assess its intention in the current set-up and the beneficiary of such a policy. Mr Mugabe was the biggest beneficiary of the GNU .Election loser rewarded with the Presidency . Life Presidency I may add. And yet Mr Mugabe has refused to give up leadership of his own party , on the basis that his party is too weak and too divided to tackle the opposition. And now we have just been told Mr Mugabe is not the problem?
A look at the Executive Presidency shows a scary trend. Those around Mr Mugabe in the 1980s devised the Executive Presidency on the hope that when Mugabe leaves they would enherit such supreme and total powers. Led by the late Eddison Zvobgo and assisted by some of the current mafia crop calling itself legal fundis Mr Mugabe was given more powers than a King would normally have. And all these Legal whiz-kids believed Mr Mugabe would leave soon and they will enherit the same powers. That was 22 years ago. And now we have the same mafia crew devising some scheme in the name of saving the people and molesting the constitution to accommodate Mr Mugabe
As indicated in my earlier article a Unity Government was still possible without Mr Mugabe as the (Life) President. Mr Mugabe has held his people at ransom just to remain in power .All the killings, murders, torture, rape, detentions ,abductions were done to allow Mr Mugabe to remain President. And the GNU as currently constituted only served to legitimize his quest for Life Presidency.
The issue at stake is the respect of the Constitution of the country. The idea that the constitution can be amended to suit an individual to remain in office is not just acceptable. If Zimbabwe is to join progressive nations like the ones above there is need to develop a culture of respecting the constitution as a guiding tool leading to a stronger and independent nation. The President must up-hold the Constitution and not undermine as we have witnessed under Mr Mugabe .
Mr Mugabe has ruthlessly amended the constitution several times just to remain in office. And as a direct result Zimbabwe is now a colony again. Zimbabwe is basically on life support and begging South Africa and other nations all because one man decided to die in office of President. Zimbabwe no longer has a credible currency or central Bank. If then we are going to correct this situation is it not a basic requirement that the man who presided over this must repent? He must retire and get some rest, spend time with his family.
At the centre of this crisis is how Mr Mugabe’s personality has been allowed to over shadow institutions including even his own party. An individual should not be allowed to be more powerful than his own party or institution he leads . In the USA the Clinton Family is very powerful ,but had to give way to Barrack Obama to lead the Democratic Party .This was so because the people said so. Mr Mugabe despite being Zimbabwe’s founding President he has not found any suitably qualified “Revolutionary” in his party to carry on the struggle on behalf of the party. The Clintons tried to plead with the people that they were the true custodians of democratic values in the same way Mr Mugabe claims to be the only and true custodian of the Revolution .
So at party level there is an institutional problem whereby the party cant replace its leaders in a timely and democratic manner. And the problem migrates from the party to the whole nation.
It is clear Mr Mugabe feels since his two vice-Presidents ( Muzenda and Nkomo) died whilst in office the same should happen to him. The only problem is that his party members and others are taking notes of these tricks and tactics . If not checked and condemned this could become an acceptable “Zimbabwean” way of doing things.
Zimbabwe requires high levels of donor aid and foreign direct investment to reach its potential. However for this to fully materialize there is need for the country to conform to internationally recognized standards of doing things. Zimbabwe has to earn the confidence of the international community and arresting a deputy minister designate ahead of swearing in is hardly the sign to show seriousness or evidence that there is “Unity”
The criticism of the GNU mechanics and implementation must not be mis-interpreted as calling for continued suffering of the people. The move is welcome in as far as it helps the nation heal and recover. However in as far as it serves to clandestinely convert the Republic of Zimbabwe into a monarch headed by King Mugabe Zimbabweans must be at liberty to expose that.
Gilbert Muponda is can be contacted at gilbert@gmricapital.com
Zimbabwe revised budget an encouraging start
The revised budget announced on 19 March 2009 by the Minister of Finance Tendai Biti marks an encouraging start in formulating a sustainable economic recovery path. The budget is particularly realistic as it seeks to restrict expenditure to revenue streams that are both realistic and achievable. Implementing balanced budget similar to what the Minister is proposing ,would be a difficult task but not impossible. If it can be implemented it will break new horizon in showing that at last a fiscally disciplined Government is in place.
Whilst its understandable that the budget does not meet all expectations this is normal given the over expectations surrounding the Minister’s new policies. It has taken close to 30 years for Zimbabwe’s Economy to decline this much and its simply expecting too much for one budget statement to correct all those policy mis-alignments.
The reduction of the budget from US$ 1.9 billion to US$ 1 billion clearly sends a message that the Government has to try and live within it means. This has a critical effect of limiting the need to use dis-credited measures such as the now in famous Quasi Fiscal Activities which were used to finance anything and everything without proper parliamentary approvals .Parliamentary approvals are critical in building confidence as they provide check and balance mechanism which is required wherever public funds are being distributed .
The down ward revision of the budget shows points that the new Government or the Minister is aware Zimbabwe can not fully rely of begging and borrowing without taking any serious steps to try and streamline expenditure in line with revenue streams available.
The revised budget clearly notes areas which urgently require funding . In particular the Minister pays attention to “declining productive capacity and hence massive de-industrialization, food shortages, loss in value of the local currency, corruption, deteriorating public service delivery particularly education, health, sanitation as well as public utilities and infrastructure”.
Whilst there is nothing new about these observations it is encouraging that the revised budget clearly highlights these problems and given the high expectations on the Minister many would be expecting him to follow through on this and ensure corrective measures are taken. A step that will unlock goodwill and additional resources from the International community.
The Minister rightly notes the need to boost production and exports which will create jobs, increase foreign currency reserves whilst increasing the tax base. Zimbabwe’s tax base which drives the Government revenue has shrunk to such levels that the Government is overtaxing the few tax payers still around. An economy that has largely been informalised like Zimbabwe can not sustain a decent Government revenue base. This is why its critical to create a conducive business environment that encourages investment and formal job creation.
Historically tax payments on income tax related to workers has been the major contributor of Government revenue. However due to the massive company closures and scale downs this had to be replaced by custom s duty and other related revenue as main source of Government funding. This is not sustainable nor is it desirable. Zimbabwe does not generate that much in foreign currency to keep importing. Therefore if there are no imports there is no import duty or other related revenue. This makes it imperative to expand and diversify the government revenue base in ways suggested in the revised budget .
The return to rule of law can assist to restore productivity on farms and encourage further investment into the Agricultural sector where Zimbabwe once had serious comparative advantages over the rest of the Region.
According to the revised budget “All economic enterprises, from the informal sector, street vendor, to the largest national corporates listed on the stock exchange, must henceforth trade and meet their tax obligations in foreign currency.” This measure confirms the earlier budget in formally accepting that the Zimbabwe dollar is now history.
This measure simply acknowledges reality even though it creates further hardships for the general public given the limited amount of foreign currency in circulation. The Zimbabwean financial system is not yet in a position to fully start lending in foreign currency which would be required to assist industry to get back on its feet.
This aspect serves to remind the need for restoring international relations. This will allow Zimbabwe institutions to tap into international capital and resources. Its encouraging to note that the Minister is aware of the need to re-engage the international community. One hopes his colleagues in the Inclusive Government will fully be supportive and stop acting in ways that antagonize well wishers in the international community .
Gilbert Muponda is can be contacted at gilbert@gmricapital.com
Whilst its understandable that the budget does not meet all expectations this is normal given the over expectations surrounding the Minister’s new policies. It has taken close to 30 years for Zimbabwe’s Economy to decline this much and its simply expecting too much for one budget statement to correct all those policy mis-alignments.
The reduction of the budget from US$ 1.9 billion to US$ 1 billion clearly sends a message that the Government has to try and live within it means. This has a critical effect of limiting the need to use dis-credited measures such as the now in famous Quasi Fiscal Activities which were used to finance anything and everything without proper parliamentary approvals .Parliamentary approvals are critical in building confidence as they provide check and balance mechanism which is required wherever public funds are being distributed .
The down ward revision of the budget shows points that the new Government or the Minister is aware Zimbabwe can not fully rely of begging and borrowing without taking any serious steps to try and streamline expenditure in line with revenue streams available.
The revised budget clearly notes areas which urgently require funding . In particular the Minister pays attention to “declining productive capacity and hence massive de-industrialization, food shortages, loss in value of the local currency, corruption, deteriorating public service delivery particularly education, health, sanitation as well as public utilities and infrastructure”.
Whilst there is nothing new about these observations it is encouraging that the revised budget clearly highlights these problems and given the high expectations on the Minister many would be expecting him to follow through on this and ensure corrective measures are taken. A step that will unlock goodwill and additional resources from the International community.
The Minister rightly notes the need to boost production and exports which will create jobs, increase foreign currency reserves whilst increasing the tax base. Zimbabwe’s tax base which drives the Government revenue has shrunk to such levels that the Government is overtaxing the few tax payers still around. An economy that has largely been informalised like Zimbabwe can not sustain a decent Government revenue base. This is why its critical to create a conducive business environment that encourages investment and formal job creation.
Historically tax payments on income tax related to workers has been the major contributor of Government revenue. However due to the massive company closures and scale downs this had to be replaced by custom s duty and other related revenue as main source of Government funding. This is not sustainable nor is it desirable. Zimbabwe does not generate that much in foreign currency to keep importing. Therefore if there are no imports there is no import duty or other related revenue. This makes it imperative to expand and diversify the government revenue base in ways suggested in the revised budget .
The return to rule of law can assist to restore productivity on farms and encourage further investment into the Agricultural sector where Zimbabwe once had serious comparative advantages over the rest of the Region.
According to the revised budget “All economic enterprises, from the informal sector, street vendor, to the largest national corporates listed on the stock exchange, must henceforth trade and meet their tax obligations in foreign currency.” This measure confirms the earlier budget in formally accepting that the Zimbabwe dollar is now history.
This measure simply acknowledges reality even though it creates further hardships for the general public given the limited amount of foreign currency in circulation. The Zimbabwean financial system is not yet in a position to fully start lending in foreign currency which would be required to assist industry to get back on its feet.
This aspect serves to remind the need for restoring international relations. This will allow Zimbabwe institutions to tap into international capital and resources. Its encouraging to note that the Minister is aware of the need to re-engage the international community. One hopes his colleagues in the Inclusive Government will fully be supportive and stop acting in ways that antagonize well wishers in the international community .
Gilbert Muponda is can be contacted at gilbert@gmricapital.com
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