The next problem was to stop the bleeding. At the scene of an accident, the key issues are, are the injured breathing and then, are they bleeding? We were breathing as a nation but we were also bleeding. To stop the bleeding, the Team had to raise new revenue and to hold down expenditure. The 2 per cent tax and tough controls on line Ministries did the that but the cost has been that Civil Service salaries have been reduced to levels where the Service can hardly survive. If Mr Mugabe had been in charge he would have simply ordered the Team to increase salaries – after all he was famous for saying in 1997 that ‘countries do not go broke, print the money needed’.
This time that has not happened and we are now in a situation where these fundamental distortions and problems left behind by the Mugabe era have been dealt with. Just when we think the cleaning up is finished we discover Z$10 billion dollars in unauthorised expenditure between 2015 and 2018. Even though Permanent Secretaries have been threatened if they exceed their budgets, over Z$5 billion in unbudgeted expenditure has been discovered in 2019. This might be even greater once the exchange losses at the Reserve Bank are accounted for. The culture of spending what we do not have goes on and will not be easily uprooted.
But look at the countries balance sheet today compared to last year. We have a fiscal surplus to help meet over expenditure, inflation has dealt with the domestic debt mountain and our balance of payments is almost in surplus. We have started paying back our debts – both internal and external. We have secured a Staff Monitored Program with the IMF and although there are problems and the program will have to be extended to give us more time to get our house in order. Our exports are growing and investment is slowly gathering momentum.
We have taken the harsh medicine of income restraint and are now in a position to start servicing all our other priorities. Fixing our infrastructure, improving power supplies and reducing the cost of doing business. Our economic fundamentals are sound and the way clear to dealing with our international liabilities. I am hoping that by December 2019 Zimbabweans will be able to see the start of a slow, but steady recovery. Next year inflation will come back to low levels by the end of the year, exchange rates will strengthen and start restoring value to earnings and capital. Our farmers will get some security of investment in the form of a negotiable lease over the land and assets they are using and our urban areas will slowly be able to restore service delivery.
2020 will not be easy, but after what we have been through it will be like the morning after the rain. To really succeed we have to work together and have faith in who we are as a nation. If we do those few simple things, the future will look after itself.
Eddie Cross
Harare 18th November 2019
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