Golden Sibanda
Zimbabwe should avoid policy formulation based on election cycles, which saw the previous administration disregard sound economic management for populist policies, which negatively affected the economy.
Respected Harare based economist Dr Godfrey Kanyenze, said the economy was expected to rebound this year after a good farming season, improved forex access, exchange rate stability and falling inflation.
Dr Kanyenze said this during the first quarter economic and business performance review virtual seminar, which was hosted by the Confederation of Zimbabwe Industries (CZI) last week on Friday.
He said economic growth was in sight after a number of key economic fundamentals, among them fiscal stability and balanced budget and restrained use of the central bank overdraft, have been achieved.
Despite the shadow of the Covid-19 pandemic, Zimbabwe recorded record industrial output last year, not seen in over three decades, while inflation is dropping rapidly, exchange rate has stabilised and the budget is in surplus.
Dr Kanyenze said a modicum of economic stability has been achieved, since the second republic came in, including reining in money supply, which fuelled inflation and rate volatility, since the forex auction was introduced.
The prevailing economic stability, Dr Kanyenze said, now needs to be sustained through consistency on the implementation of sound economic policy framework as well as avoiding populist policies during election time.
“To sustain it firstly, we should move away from policy being driven by election cycles because it is quite natural even if you were the one in Government to relax certain things, for example cutting back on expenditures.
“You won’t do unpopular things when you are going towards an election that is why I was suggesting that let us now ensure that things are now collectively through social dialogue so that there is broader ownership of policy.”
“(Going forward) it (economic policy) should no longer be based on political imperatives that ‘I want to be elected’. (If as a politician) I go to a rally, I should be able to say these are policies we agreed with everyone.
“Workers representatives should be in it and representatives of business are in it, so you can no longer blame a particular political party for it,” Dr Kanyenze emphasised.
That way, Dr Kanyenze said, the Government will be able to wean policy formulation from election cycles, a phenomenon which often characterised Zimbabwe and its stuttering economy during the First Republic.”
“That results in political expediency policies, which may not be economically rational. Once you start to create cohesion to have shared vision, you are now in the realm of developmental states,” Dr Kanyenze said.
A raft of economic and legislative reforms instituted by the Government since the Second Republic took office have put the economy in a much better condition, priming it for recovery and growth, economists say.
The Harare based economist said the country needed to forge ahead with state and parastatal reforms, which are facing line ministry resistance, nip corruption in the bud, build and rehabilitate infrastructure to sustain stability.
He also said the country needed to craft sound economic policies that promote formal business, capital formation while bringing the rural majority into the mainstream economy in order to sustain the progress.
Economic analysts Farai Mutambanengwe, said the prevailing economic stability, on the back of reforms by the Government, was due to “stable monetary base, stable policy environment and structural dollarisation.”
Dr Kanyenze said President Mnangagwa’s incumbent administration had, since assuming power in September 2017, broken ranks with a number of bad macro-economic policies that had turned the economy on its head.
Among the key reforms that the new Government has adopted is discontinuation of regular recourse to the central bank window, sticking to approved national budgets and keeping a stranglehold on money supply.