President Emmerson Mnangagwa who has been under tremendous pressure to get the country back on track since October last year and has faced strikes by doctors, strike threats by civil servants and anti-government protests which led to a widely condemned crackdown by security forces, says his reform agenda is progressing well.
Most Zimbabweans will not agree with him but Mnangagwa said: “my job is to lead the country to where it ought to go not where individuals want. I was and am still aware some of our people will be angry. It’s okay”.
The President said he had been under pressure to enforce price controls but he was not going to do that because “the laws of demand and supply must work”.
“As a leader, I know nobody will be happy with austerity measures because they come with a lot of pain,” the President said according to Newsday.
Inflation, which measures the general level in the increase of prices, was at 3.5 percent in January last year. It dropped to 2.7 in May but rocketed to 20.9 percent in October and 42.1 percent in December.
American economist Steve Hanke says it had rocketed to 253 percent last month.
Mnangagwa, who maintains his mantra that “Zimbabwe is open for business” but has now added “and dialogue” said his administration has started repealing toxic laws that hampered foreign direct investment, which seems to be the answer to Zimbabwe as it is locked out of international financing because of sanctions imposed by the United States since 2003.
“That is why we have moved quickly to do away with the indigenisation law. The move gained us 11 points on the global ease of doing business last year alone. It was part of a group of statutes that we were advised by the World Bank that they were an impediment to investment. They include the Public Order and Security Act as well as the Access to Information and Protection of Privacy Act,” he said.
“We did not think it was necessary for an investor to bring $500 million into Zimbabwe and then we turn around and ask for 49% from them just like that…
“If we fail, we must admit it. This is because as a country an investor comes, brings new technology, employs our people, builds infrastructure, pays taxes and brings new skills. If we can get more out of an investor, the better,” he said.
The President said the Zimbabwe Investment and Development Authority which is aimed at reducing bureaucracy to speed up investment would be up and running by April this year.
His Finance Minister Mthuli Ncube also seems to share the same optimism as he says inflation should be down to single digit levels by the end of the month.
Mnangagwa now seems to have the support of the business sector and a source said Zimbabwe should be back on track in the next two months.
The source said that the fiscal discipline spelt out by Ncube in October is paying off because Zimbabwe has managed to cut expenditure and achieve a surplus on a month-to-month basis.
“Meetings between the government and the private sector are meant to align the corporate sector to keep the cost of production at current levels and in a normal rainy season April would see prices of food stuff coming down,” the source said indicating that things should start stabilising in April.
Ncube has promised to review perks for civil servants in April indicating that he also believes that things will have stabilised by then.
The source also said meetings between Zimbabwe and South Africa should bring back stability in Zimbabwe.
Although South African media and private media in Zimbabwe have been awash with news that South Africa refused to bail out Zimbabwe, South African President Cyril Ramaphosa said talks were going on between the two countries’ finance ministers and he would meet Zimbabwe President Emmerson Mnangagwa once the teams have come up with something.
The source said South Africa’s African National Council and opposition parties, except, the Democratic Alliance, supported the Zimbabwe bail out.
The source also said the recent increase in the price of fuel which some say sparked off the anti-government protests that saw several people killed when the demonstrations turned violent is now paying off.
The procurement of fuel put the country in an economic vicious circle but the confusion has been plugged by the decision to increase the price.
“The government is not under pressure to procure fuel because consumption has gone down and pilferage through the borders has been curbed,” a source said.