NEIGHBOURING South Africa has told President Emmerson
Mnangagwa’s administration to stop political interference in public
institutions, respect trade agreements and allow competition in business if it
is serious about turning around the collapsing economy.
In a straight talk by South Africa’s ambassador to Zimbabwe
Mphakama Mbete during the Political Actors Dialogue (Polad) economic summit
last week, government was told not to tinker with important economic
institutions for political gain.
“Public institutions are key to proper economic management
and must be allowed to pursue their mandate in line with the policy framework
and legislation that establishes them. These institutions are important to
provide a stable and predictable economic environment for business to thrive,”
Mbete said.
Business, particularly through Employers Confederation of
Zimbabwe, has accused government of dragging the Reserve Bank of Zimbabwe into
quasi-fiscal activities and allowing it to print or generate money for
political expediency and resultantly undermine the local currency.
Mbete said research showed that governments which
manipulated institutions led generally poor nations.
“Nations with extractive political and economic institutions
are likely to be poor compared to those with inclusive economic institutions,
where the rule of law is protected against rent-seeking and political
manipulation,” he said.
Ad by Valueimpression
Mnangagwa’s government has been posturing, telling its
African and international audiences that sanctions were affecting economic
development in the country and hindering foreign direct investment (FDI), but
Mbete sang from a different hymnbook.
“Zimbabwe has presented itself to be open for business,
which we believe is an appropriate approach to developing this country and
economy. However, in order to attract significant flows of direct investment,
it is import that Zimbabwe improves its record concerning the following issues;
security of tenure and investment protection; repatriation of proceeds by
investors; the honouring of bilateral trade and investment agreements; the need
to open up the economy to competition and establishment of new credibilities,
lastly optimal debt servicing,” he said.
Zimbabwe has been writing laws to protect local industries
from competition, especially by enforcing punitive import tariffs and closing
out some sectors to foreign competition.
These include Statutory Instrument (SI) 64 of 2016, whose
objective was to boost domestic production by protecting local industries from
unfair competition from foreign firms.
The SI resulted in the removal of 43 products from the Open
General Import Licence.
Zimbabwe, however, repealed SI 64, all its predecessors and
consolidated their contents into SI 122 of 2017 with import controls, though
relaxed, still haunting the nation.
The laws came under scrutiny after the country joined the
African Continental Free Trade Area, which will remove economic borders and
bring fierce continental competition.
Mbete told government that without addressing these issues,
FDI would seek safer destinations.
“We believe that in a highly competitive environment for
FDI, these are but a few of the basic conditions that must be upheld at all
times. In our view, failure to do so means that investment capital will always
look past Zimbabwe to other safer havens,” he said.
Touching on the core of economic decay, Mbete said the
shortages of energy, fuel and water in Zimbabwe were not making matters any
better.
“Zimbabwe has an industry base that has been neglected for
long and needs reinvestment and re-calibrating. This neglect undermines
government revenue collection potential since industry is operating below its
potential. Industry and the economy by extension triumphs when basic services
such as energy, fuel, water, bulk services, for example, are provided in a
consistent and predictable way, this is essential for long-term planning by the
productive sectors,” he said.
“We think it is important for all members of society to
enter into a social contract wherein government, business, labour and citizens
rally behind a common vision of the country of Zimbabwe.
Success requires mutual co-operation of all players as no
one section of society can do it alone.”
Added Mbete: “South Africa, we believe, has had a very
successful social contract through the National Economic Development Labour
Council.” Newsday
0 comments:
Post a Comment