Morris Mpala, MoB Capital Ltd
EVERYONE keeps on saying we need to get the underlying fundamentals right. Or you hear people say the fundamentals are wrong but what are these fundamentals that are critical to economic sustenance. Do people know what they are really talking about?

Let’s explore the fundamentals that need tweaking. By and large here are the fundamentals that we are on about. We keeping it very generic and not getting into finer details.

A country needs a good savings through a great savings culture. It’s a good start for developmental purposes.

Confidence and trust
Confidence levels between stakeholders have to be high. The same applies to trust amongst economic actors.

Insurance and assurance
A steady policy on the above and stable sector to bring about confidence and source of cheap funds for development.

Income against expenditures
The need to watch the national income and expenditure in line with recommended ratios .Sticking to budgets vital.

Banking, insurance sector
A vibrant, stable sector is a backbone of a stable macro economy and fertile ground for strong economic foundation.

Policy consistency
This is key to creating a conducive environment for industry and commerce to thrive.

Productive lending
This key to any economy it is conducive environment for business to thrive

Gross Domestic Product (GDP)
A healthy gross domestic product is required for a country to sustain its growth.

National debt
Low national debt is required. As a country we need a very manageable, serviceable and lower quantum debt.

Debt management
A good debt management system is required. All loans need to be serviced regularly and religiously to be in good books with international lenders and other stakeholders. This allows other private sector players to access loans due to excellent country credit risk, which is given by international rating agencies.

Domestic borrowings
This needs monitoring to avoid overcrowding the private sector. The need to regulate these borrowings in line with international standards.

Property rights
The need to respect property rights to aid confidence and trust in the country. It’s a booster for local and foreign investors.

Corruption and corporate governance
No corruption to maximise resource utilisation. A good corporate governance culture is recommended.

Fiscal and monetary policies
Policies that encourage stability, growth, FDIs attraction, manage inflation, monitor broad money supply, strengthens financial services sector. Where possible acts as the lender of last resorts.

Social contracts
The need to look into the socio-economic climate with idea to stabilise the environment to cater for marginalised, old and weak, disadvantaged, financially excluded and reduce poverty.

Basic economic comprehension
An analysis and complete grasp of economic matters is required to stabilise the environment for better policies.

Transparency and accountability
Increase the above for a better environment for business to thrive. It sets the tone for good corporate governance.

Infrastructure development
Vibrant development in all the areas of major requirements rail, road, air, housing, learning institutions, energy et al.

Political stability
A country with political stability is recipe for economic prosperity.

Rule of law
Observing the rule of law breeds confidence and trust amongst all local and international stakeholders. This is key for a stable environment knowing any disputes redress will be on merit and no one is above the law.

Educated population
Probably I should say knowledgeable workforce for productive purposes and cost effective.

International best practices
Things have to done with the guidance of best practices to create stable, reliable environment that is predictable and is user friendly to all.

Private sector support
The biggest sector needs support in a number of ways that encourage its survival and sustainability. From policies to direct intervention.

Export competitiveness
Encourage export competitiveness through interventions to increase exports to balance outflows.

International stakeholders
Maintain cordial relations with outside world to encourage FDIs. Be a global player as it were.

Marginalised sector
Social responsibility to cater for vulnerable segments of the population.

Reserves ratios
It goes without saying a country needs to have reserves in its coffers to cushion itself from economic shocks .You need three months import cover. We do not talk of country fundamentals but individual fundamentals. A warped country’s fundamentals are just but plainly a warped society period.

Needless to say that we need to get fundamentals right all the time to get a financially hygienic environment for all stakeholders to thrive in a financially sound environment. It’s all about fundamentals if we are to increase our country financial well being.


Morris Mpala is the managing director of MoB Capital Limited, a Bulawayo headquartered micro-finance institution with footprint across the country.

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