ZIMBABWE this week unveiled an ambitious economic blueprint as the authorities map out a new trajectory for the floundering economy over the next five years, but analysts say the economic strategy may come unstuck if the government fails to implement the far-reaching reforms necessary for the country to turn a new leaf.
President Emmerson Mnangagwa on Monday launched the National Development Strategy (NDS 1-2021-25), a neo-liberal economic plan, as government desperately seeks answers to the unrelenting problems facing the southern African country where a humanitarian crisis is brewing, according to United Nations agencies.
NDS 1 is among several economic blueprints launched by the Zanu PF government in the past decade and it remains to be seen if Mnangagwa’s administration will exhibit a change of attitude in implementing the set targets.
The blueprint replaces the Transitional Stabilisation Programme (TSP), an economic stabilisation plan launched after the 2018 elections, which fell short in setting Zimbabwe on a path to recovery despite a glowing review from the authorities.
During the TSP, Zimbabwe also failed to implement the IMF Staff-Monitored Programme (SMP) and the projected double-digit economic growth was not achieved, among other shortcomings.
NDS 1 is anchored on 14 points, namely: economic growth and stability; mining; agriculture, food and nutrition security; governance; moving the economy up the value chain and structural transformation; human capital development; environmental protection; climate resilience and natural resource management; housing delivery; digital economy; health and well-being; infrastructure and utilities; image-building and international engagement and re-engagement; social protection; youth, sport and culture; and devolution.
Mnangagwa’s government is buoyant in portraying NDS 1 as the panacea to Zimbabwe’s unrelenting economic problems. He promised an improved quality of life for all Zimbabwean by 2025.
The blueprint will be anchored on the mining sector. However, critics have noted that, given volatilities on the global markets, the concentration-risk of basing hope on the mining sector may result in the government missing some of the targets given that Zimbabwe is a primary producer.
The smuggling of precious minerals such as gold, which according to Home Affairs minister Kazembe Kazembe is prejudicing Treasury of US$100 million in potential revenue may also affect the recovery plan.
“Through the implementation of NDS 1 we, therefore, envision inclusive development, an improved quality of life for our people and shared prosperity. Our country must equally emerge from the strategy period more competitive with diverse and vibrant trade relations and investments,” Mnangagwa said.
NDS 1 promises dramatic economic recovery of 7,4% in 2021; 5,5% in 2022; 5,2% in 2023 and 2024, while a 5% growth rate is envisaged for 2025.
Zimbabwe’s economy will this year contract by -7,5% according to the African Development Bank and a another drought would further cripple the economy, amid projections of negative growth.
The country last experienced positive economic growth between 2009 and 2013 when the economy recorded 12% average growth.
The new economic plan aims at creating 760 000 formal jobs. Considering waning economic fortunes amid the raging Covid-19 pandemic, which has over the months led to job losses, 760 000 jobs is a drop in the ocean in a country where nearly 90% of the employable population is out of work.
Mnangagwa’s government, which is also grappling with chronic high inflation, has set an ambitious target of achieving and maintaining single-digit inflation annually. The government sees the stabilisation of the domestic currency as a pillar for stabilising price hikes.
Inflation has been among the deterrent factors to investment where Zimbabwe remains an unattractive investment destination.
The new economic blueprint requires quality leadership and willingness to embrace reforms, analysts say.
Economist Gift Mugano said while the economic blueprint was largely progressive, the government should ensure implementation and quarterly reviews.
“The NDS is a great document. It presents binding constraints to the goals, which we hardly saw in other economic blueprints and there are strategies to cater for the constraints,” Mugano said.
“I don’t think the document is ambitious, it can be achieved. The devil lies in the implementation. Government should give quarterly updates.”
While NDS 1 is essentially an ambitious wish list for the next five years, the government’s capacity to marshal resources for the implementation of the blueprint will be key.
Locked out of the international community and with no hope of accessing funding from international financial institutions (IFIs) like the World Bank, Zimbabwe will be looking to local capital to fund the NDS 1.
With foreign direct investment dwindling in recent years, domestic investment is expected to spur NDS 1 but economist John Robertson said the government should not make life difficult for the private sector.
Robertson said policy consistency was needed for private equity holders are to find it worthwhile to fund the new economic thrust.
“Government is not trusted. The trust they need should be restored by staying out of the way of investors,” Robertson said.
Robertson said the new economic blueprint was overly ambitious and the government should follow through on its promises by way of practical action, which has often lacked in the past.
He said NDS 1 will only be successful if the government also brings back land on the open market. This would encourage foreign investors, he said.
“Some of the promises are quite brave. They must be determined to keep their promises. They say they will restore property rights and the rule of law, it is easy to say these things but harder to act them out,” Robertson said.
The private sector will be crucial in propelling NDS 1 to success, but an investor friendly environment must be created.
“This will be done through the creation of a thriving private sector-led competitive economy, implementation of sound macro-economic policies anchored on fiscal discipline, monetary and financial sector stability including enhancing an open and business friendly environment, which promotes both foreign and domestic investment,” the policy document reads.
NDS 1 also envisages growth on the back of the adoption of bold economic policies.
Gross national income is expected to reach:
US$1 159,80 (2020);
US$1 842,20 (2021);
US$2 137,10 (2022);
US$2 712,70 (2023);
US$2 960,70 (2024); and
US$3 207,30 (2025).
Mnangagwa promised good governance, respect for human rights and is anxious to salvage the country’s battered image through robust information management to the international community.
While image building is a good exercise to restore international goodwill, the arbitrary arrests of opposition politicians, journalists, human rights defenders and abductions will continue to dent the country’s image.
Already buckling under international pressure on the issue of human rights violations, the Mnangagwa administration needs to work hard to gain the trust of erstwhile partners.
NDS 1 will remain an ambitious wish list if Mnangagwa does not implement sweeping reforms to set the country on a sustainable path to stability and growth.