Institutionally, there should be a Macroeconomics Coordination Committee (MCC) created, comprising the Ministry of Finance, Reserve Bank of Zimbabwe, Zimstats for data quality, Ministry of Industry, Trade, labour, and planning department.
The committee would meet once a month but certainly once a quarter, and officials would continue to interact in the interim.
A macroeconomic model that facilitates rigorous scenario analysis and input should be created. Each of the parties should be able to access the model and input data.
In addition, a Dynamic Stochastic General Equilibrium Model (DSGE) that combines the micro economy (consumers and industry) and macroeconomic (fiscal and monetary) should be built, and simulate the direction of the economy under various scenarios, over a 15 year period or so.
This allows one to include the informal sector. I have built a DSGE model for Ghana, Kenya, Nigeria, Zambia, Sierra Leone, and trained policy makers from 40 countries across Africa from both Central banks and Ministries of Finance.
On the broader macroeconomic model, it can be controlled through especially designed intranet platform. I personally have implemented a macroeconomic model and intranet, in this way in a few countries in Africa. This way, economic policy-makers in Zimbabwe can engage with officials from institutions like the IMF and World Bank and others, at the same level, if not higher.
Finally, external engagements with partners is key, especially with the IMF, World Bank, Africa Development Bank, Chinese Import and Export Bank, Afreximbank, PTA & TDB Bank), KfW, capital markets, global banking institutions, being invited to G20 meetings of Finance Ministers as observers and guests. Indeed, roadshows to visit bilateral creditors is important as well.
Zimbabwe should also create a Zimbabwe International Economic Advisory Council (ZIEAC), under the Ministry of Finance and working with Foreign Affairs, so as to build a constituency externally, and help drive foreign investment into Zimbabwe.
Members of the ZIEAC would be senior economists with global influence and stature, and senior business leaders.
The members should be drawn from various continents in Europe, US, Asia, Africa, including Zimbabwe.
The new government of Imran Khan in Pakistan has just appointed its Advisory Committee. The target is no more than 15 people, who will meet every quarter (physically or virtually) with the Zimbabwe officials, to brainstorm and give their advice on how to improve effectiveness globally and domestically for building investor confidence.
Needless to say, the conditions for the ease of doing business should be improved significantly to make Zimbabwe competitive against its peers like Botswana, Zambia and Rwanda, for example.
All this helps creates an understanding of what Zimbabwe is aiming to achieve on the macroeconomic front, in creating macroeconomic stability and in building investor confidence going forward.
By Mthuli Ncube for The Source. This article was written before his appointment as Finance Minister.
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