The world is changing fast and to keep up you need local knowledge with global context.
Zimbabwe is in the grip of a humanitarian crisis, with more than a third of its people very hungry and requiring emergency food supplies in order to survive. This is partly linked to a severe drought. But mostly, Zimbabwe’s problems stem from a political crisis, with a tiny elite living in the lap of luxury, driving sports cars and enjoying unfettered access to foreign currencies while the majority don’t have jobs or are expected to work for less than it costs them to get to work as hyperinflation consumes the purchasing power of money. For Eddie Cross, an economist in Zimbabwe and an opposition politician, the problems are solvable. He sets out a practical plan. There is just one caveat: this plan needs strong leadership. With President Emmerson Mnangagwa and his team so far failing abysmally at trying to fix Zimbabwe after the post-coup Mugabe era, it’s looking a lot like another dramatic political change is needed before Zimbabweans can mend Zimbabwe. – Jackie Cameron
The Road to Recovery
By Eddie Cross
In the past 18 months we have been struggling as a country to deal with the legacies of 37 years of dictatorial control and maladministration. This has involved correcting our living standards and dealing with historical liabilities. Now that we are nearing the end of this phase, we need to work out how to get onto the road to recovery. In other countries like Argentina and Greece they have had the assistance of a big brother – the IMF and the EU. In our case, I think we are on our own.
For many in our land the present situation is simply impossible. We need a safety net that will assist many individuals to get through the next year until the benefits of any recovery can start filtering through. In addition, we need to start to take advantage of the many things that are our own integral advantages as a country – some of them a legacy of our recent past.
Let’s start with the need for targeted support for the vulnerable. When the Government made the right decision to remove all subsidies from the basic commodities of fuel, electricity, maize, vegetable oil and wheat, they hurriedly had to reverse themselves when they appreciated that this was a step to far. But what was wrong being not the basic decision, but it’s sequencing. What we should have done was to introduce a national voucher system for these basis needs.
Under such a system we could get the Reserve Bank to print vouchers which could be exchanged for these basic foods at any store or supermarket and provide sufficient food to meet basic needs. This would enable the absolute poor among us to buy their basis needs to survive.
Subsidies on an un-targeted basis would cost us many times more than that and achieve little, most of the expenditure wasted on corruption and on other beneficiaries who do not need subsidy. Current blanket maize subsidies will cost us nearly Z$3 billion in the next 12 months.
Then we have to start getting the pension and insurance companies with pension liabilities to start adjusting pensions in line with the decline in the value of our currency. I need to be persuaded that this is not possible even now.
There is the need to completely change the way in which we deliver education and health services to our people. The present system is simply not working and if things continue like this health and education for the great majority will be a thing of the past – if it is not already so. We need to transfer responsibility for these essential services to the Communities they serve. Let School Boards take over the administration and development of schools, let local elected Boards take over local clinics and hospitals. Make sure these institutions are run properly with audited accounts and adequate supervision and then support the poor and disadvantaged with government funded grants that are based on an assessment of individual needs and capacities.
Then I think we have to take a close look at every line item of Government expenditure at all levels. We need to adopt what we call in the private sector a zero based program of assessment. Is this activity essential to the service or product being produced, is this the best way of getting there, is there any waste and are we working to capacity and on a least cost basis? Can it be better done by the private sector? I am afraid that over the past 40 years we have allowed our Civil Service and Municipalities to become bloated with people who do next to nothing for their salaries.
Then we need to create value and financial capacity by providing people who today have no security over the assets they are using or living on both in rural and urban areas. If we were to adopt a simple 99 years lease for use in rural areas by farmers, we could give title rights to a million farmers occupying on average 40 hectares worth a conservative Z$15,000 per hectare – Z$600bn. This vast store of equity wealth would transform the lives of our poorest community – the small scale farmers in rural areas. It would be quickly translated into production and wealth and enable our bankers to unlock vast potential for private sector funding and support.
In urban areas, largely because of the activities of the land barons, we have hundreds of thousands of homes in urban areas that do not have any security of title. Just give them freehold legal title and we would create another Z$2trn in capital value – all of which could be used as collateral for borrowings that could go into a multiple list of end uses. One of the great assets we have are the unencumbered fixed assets we have created over the past 40 years. Let’s now put these to work for everyone’s benefit. How do we do this – using modern technologies which mean that we can extend these rights to everyone at very low cost.
We need to talk to our Diaspora and to agree how to help them invest at home and to support their families here. We have a Diaspora of probably nearly 6 million adults who earn tens of billions of real dollars in the outside world. They can send money home in an instant and are keen to invest in ventures that make sense and will yield a real return. But they want to know that their money and their families are safe. Is that so difficult? They also are an enormous fund of intellectual capital with great experience. Let’s harness this to our mutual benefit.
Finally let’s use our rich resources and location at the strategic cross roads of the region. We are the richest country in the world on a per capita basis when our natural resource base is valued and set off against our population. New information suggests we are already producing over 100 tonnes of gold per annum worth an estimated $4,5bn. We could produce 3 million tonnes of ferrochrome worth another $3bn. In the process we would put millions of our people to work – many in self-supporting small scale business.
We could put 2 million hectares under irrigation – generating many billions in farm products and again putting millions to work. We could become one of the world’s largest producers of citrus, and horticultural products. We could dominate the world market for quality tobacco and fibre based crops. The list is endless.
For the past 5 decades, the fastest growing industry in the world has been tourism. Dubai with nothing but desert and sea water has created a transport and tourist hub that handles a million people a week today. Spain, an arid and harsh European peninsular attracts another 60 million holiday makers every year. Zimbabwe with its perfect weather and moderate temperatures, where you can play golf in brilliant sunshine 360 days a year on world class courses for a small fraction of what it would cost you anywhere else in the world and with the Victoria Falls and the wild life Parks, remains a hidden opportunity.
I am convinced that if we get our policies right, nurture a national consensus on where we want to go and draw on our rich local and Diaspora resources we can get Zimbabwe onto the road to recovery and growth. But we have to maintain our discipline and peace, we have to demonstrate our capacity manage our affairs properly and to get corruption and all forms of human rights abuse under control. All of that is under our management – we do not need any outside assistance or help to create these conditions. All it takes is leadership.
Cyril Ramaphosa: The Audio Biography
Listen to the story of Cyril Ramaphosa's rise to presidential power, narrated by our very own Alec Hogg.