EDITORIAL COMMENT: Positive sentiment in international community must turn into concrete business

HANDSHAKE4

Reputable international market watchers are beginning to acknowledge the good work that the new Government led by President Emmerson Mnangagwa is doing.

They are recognising that the refreshingly good work that is being done is a step towards an economic recovery that all of us are desperate for.  His Government is taking all the right decisions that will inspire investor and public confidence thus should take the economy forward. Only a hopeless naysayer will not recognise the global goodwill that welcomed President Mnangagwa’s rise to power and the potential which the reforms that his Government is putting in place as a strong foundation for the rebooting of the economy.

The Government is reviewing the Indigenisation and Economic Empowerment Act, is championing a conciliatory brand of politics that doesn’t take the opposition as an opponent to be crushed, is bringing order to the agriculture sector without reversing the revolutionary land reform programme and will soon reengage the international community in a robust manner.

Furthermore, his Government is cutting public expenditure, is spending more on health and so on.

In short, the new Government is implementing policies that are corrective, to some extent opposite, of what the pre-November 24, 2017 leadership was executing, policies which were responsible for sinking the economy deep into the mire.

One influential authority that has recognised the ongoing progress is the Harvard Business Review.  In an article that was published only 34 days after President Mnangagwa’s inauguration, Anna Rosenburg and William Attwell wrote that an economic recovery is likely to result from policies pursued by the new political administration in our country.  Significant opportunities should be created thus international firms with an appetite for risk and are willing to invest in Zimbabwe could benefit from “first-mover advantages”.

“Mnangagwa is clear that he wants to rebuild the economy and start afresh with foreign businesses. This is promising for a market formerly dubbed the ‘breadbasket of Africa,’” said the pair in a jointly written article.

They however, conceded that the new administration faced a challenging task after the local economy allegedly halved from $8 billion in 1997 to $4,4 billion in 2007. They said when the reforms that are being pursued by the new administration eventually set in, “significant opportunities will emerge across an array of sectors and segments — both formal and informal”.

President Mnangagwa’s first actions in office have given a signal that he is serious about economic reforms.

“Mnangagwa’s first actions in office underscore how important he views economic recovery. Even before announcing his new Cabinet, Mnangagwa installed a key reformist, Patrick Chinamasa, as acting Finance minister, tasked with tackling corruption and re-engaging with international institutions to unlock funds to ease liquidity shortages,” reads part of the article, which was published on December 28.

“The President also announced the indigenisation ministry will be disbanded and the programme scaled back. He has proposed reforms, such as tax breaks for mining firms and commercial farmers, aiming to assist export-oriented businesses and earn Zimbabwe much-needed hard currency.  Mnangagwa is also taking steps to shift the culture in government towards assisting, rather than inhibiting business.”

Rosenburg and Attwell are sub-Saharan Africa specialists at advisory firm, Frontier Strategy Group (FSG) that is based in Washington DC, United States.

FSG has the ear of a broad market of global opinion makers that include audiences of global media outlets such as The Financial Times, The Wall Street Journal, The New York Times, Forbes, BusinessWeek, Bloomberg, CNBC, Reuters and BBC.

We know how key advisory firms are in shaping investor and public confidence in the West.  We also know how key global news outlets are in doing the same.  Therefore, if an organisation as authoritative as FSG have a complimentary view on a political order and economy such as ours, there is potential for companies in the US and elsewhere responding positively.

In their piece, Rosenburg and Attwell site the consumer-facing sector, technology and agriculture as areas that offer potential for growth when the economy begins to recover.  By deliberately boosting the middle class, the envisaged recovery will promote demand, especially for consumer-facing industries, they say.

There is no doubt that our country has all it needs to attract investment and to get the economy back on even keel.  The country is endowed with many natural resources, has an educated and disciplined workforce, it sits at a strategic geographical position in Sadc, has the basic infrastructure (though it needs investment to revamp it) and has what is said to be the best climate on earth.

The missing link was only political but that has been taken care of.

Our hope is that President Mnangagwa and his team will continue on that path.  We also hope that the positive mindset that is emerging in markets that had long stopped thinking and talking about Zimbabwe will hold.  Investment should pour in as well as other forms of support.  Sanctions will have to be removed too for normal relations to resume.

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