By Prince Tongogara
President Robert Mugabe has a well-known independent streak of thought that displays his disdain for collective responsibility. It is a streak that borders on recklessness as much as false bravado.
Zimbabwe has over the last six years been implementing the World Bank Staff Monitored Programme (SMP). This is a form of economic structural adjustment programme (ESAP) which is built around the implementing country setting its own targets on issues that needs addressing.
Under the SMP that started during former Finance minister Tendai Biti, Zimbabwe was working on its economic fundamentals that included restructuring its civil service (which means retrenching employees) so as to reduce its spiraling recurrent expenditure that now stands at 92% of the national budget. Employment costs alone are gobbling a massive 82% of the budget according to Minister Patrick Chinamasa now heading the treasury.
Among the agreed reforms are the ongoing civil servants skills and human audit among the 500 000 government employees and introduction of cash budgeting. However, these measures in themselves are in adequate as treasury complaints the declining revenue base, non-receipt of diamond revenues and the dying formal economy indicated by the growth of non-tax paying informal sector across the country.
Chinamasa in last resort to create capital formation last week decided to suspended civil servants bonus for the next two financials starting this year and to review the same in 2017. The measure was going to save the country $340 million in the same period.
Chinamasa argued, “We have been exploring a number of measures to contain Government recurrent expenditure, and channel resources to less capital-intensive and high-impact Public sector Investment Projects.”
He added, “There is an urgent need to create fiscal space for us to finance the ZimAsset programmes.”
These measures were part of the SMP and were to send the right signals to World Bank that the government is ready to cut back on recurrent expenditure and start investing in capital projects crucial for capital formation.
President Mugabe reversed all this in less than a week in his key note Independence Day speech. He said Chinamasa had acted unilaterally without consulting the cabinet and presidency in particular hence the decision is a nullity.
Mugabe to wild cheers promised thousands who braved the chill rainy weather that civil servants bonuses will be paid.
Mugabe’s decision reinforces his reckless populist policies despite the havoc they may wreak on the fragile economy and scare away funders and investors.
In the last 35 years, history is replete with such populist policies by Mugabe that have helped accelerate Zimbabwe’s economic demise.
Mugabe against the 1998 All stakeholders Land Conference went on to implement the chaotic land reform programme that crippled the country’s economy as new farmers without tenure and access to capital and markets failed to produce. A decade later the agriculture sector is still on the slow recovery path.
In trying to defend the chaotic land reform, Mugabe introduced another populist agriculture inputs scheme and farm mechanization programme that left the country indebted to the tune of over $500 million in less than a decade.
To cap it all, Mugabe has remained steadfast on his indigenization rhetoric despite abundant evidence that the policy has scared away foreign direct investment into Zimbabwe. In the last decade, Zambia and Mozambique have overtaken Zimbabwe in foreign direct investment as the country continues to slide down on its investment ranking in the region.
One can conclude Mugabe remains the main stumbling block to the country’s recovery from man-made economy disaster through his reckless populist rhetoric and political expedient policies that usually are uttered from political rallies than his official offices – Munhumutapa. He has also exposed his ministers not to be believed by their audiences thus making the country rely on his whims and will-power.Even the share ownership schemes have proved to be a show of well written cardboard box-made cheques representing empty bank accounts much to the disappointment of paraded chiefs and vulnerable villagers.