Zimbabwe’s 2018 budget lacks depth says chartered development financial analyst

Parastatals

The call by the 2018 budget to either eliminate, commercialise, or privatise some parastatals is as yester-year as the Economic Structural Adjustment Programme (ESAP 1991 – 1995) but a very welcome development.

Better late than never, they say. The Zimbabwe United Passenger Company (ZUPCO) is an example of a parastatal that should not have been created at all. It provided all the opportunities for and examples of rent-seeking and personalisation of state, but more essentially, taxpayers resources.

To a comparable degree, other parastatals were abused to bankruptcy like the Zimbabwe Iron and Steel Company (ZISCO), the National Railways of Zimbabwe (NRZ), to mention just a few, but these may still be critical to the nation state called Zimbabwe.

From an emotional patriotic assessment, one would prefer to see them remain parastatals but not in the old format: it is not competitive. Inevitably, these and other similar parastatals still have an asset base that would be critical to their revival.

It is now an era of ‘Business Unusual’ and they should be commercialised at the minimum and government involvement in their management should be arms-length and minimal. As promised in the budget, the government should just focus on creating an enabling environment through guaranteeing institutional, systems and process integrity.

Chinamasa, should provide a detailed breakdown of the affected parastatals, their current state and potential fate. This will be an enabler for institutional transparency and accountability especially insofar as potential capital raising and restructuring of the respective and affected parastatals may be necessary.

Infrastructure and Energy Development

Infrastructure and energy are key to the development objectives of any nation. For Zimbabwe the infrastructural and energy generation backbone is still present but is the infrastructure adequately serviced to provide the spur required for recovery?

And by extension, can the same infrastructure be the launchpad for competitive and sustained economic growth with the potential to drive inclusive and equitable wealth creation?

Zimbabwe’s infrastructure has suffered sustained degeneration and neglect such that bold commitment to infrastructure regeneration would have been the minimum acceptable.

But, that can only be possible with funding which is Zimbabwe’s major weakness at the moment. Unless Zimbabwe becomes a safe destination to capital, unless its liquidity and foreign currency repatriation legislation becomes fluid, and until business is freed from the shackles of political patronage, Zimbabwe will continue to run on the Rhodesia legacy infrastructure, plus arguably token additions done in the past 37 years.

But, the present level of infrastructure development will not be sufficient for sustainable growth, because it was not even sufficient for the economy in 1980.

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