…TSP lapses after blowing hot air
Finance and Economic Development Minister, Mthuli Ncube, has begun the consultation exercise with various stakeholders on the new economic development plan to replace the Transitional Stabilisation Programme (TSP) which was launched two years ago in pursuit of a new trajectory, Business Times can report.
The new framework is expected to guide government’s policy choices, actions and implementations.
This is also expected to facilitate the implementation of Vision 2030. The government wants the country to be a middle-income economy by 2030.
The latest development was revealed by Public Service, Labour and Social Welfare Minister, Paul Mavima at the Employers’ Confederation of Zimbabwe meeting held in the capital last week.
In the same meeting employers had complained that government’s policies and the inconsistencies were bleeding industry.
“Government remains seized with the goal of growing our economy and as you are aware the Ministry of Finance is now at an advanced stage in consulting all stakeholders on the new economic blue print to succeed the TSP,” Mavhima said.
“I am in fact confident various social dialogue platforms available to business will also be utilised by our social partners to come up with concrete proposals that can inform the new national development plan.
The Ministry of Public Service, Labour and Social Welfare remains at your disposal should you wish to channel your input through it.”
Many say the TSP has failed to stabilise the economy with economic conditions deteriorating. Zimbabwe is locked in a downward spiral characterised by severe shortages of foreign currency especially the United States dollars.
The government now relies on exporters for supply of the greenback. But, there are few exports because there are no adequate raw materials locally. This is worsened by crippling power shortages.
Countries like Zimbabwe, which are hit by balance of payments crisis, are supposed to get help from the International Monetary Fund (IMF), in which the southern African country is a member.
But, the IMF cannot lend to Zimbabwe until the country clears its arrears to other international institutions such as the World Bank and the African Development Bank.
The international financiers take a cue from the IMF. It appears, Zimbabwe will struggle to do that without another loan. Apart from that, Zimbabwe’s petrol and diesel service stations either have no fuel for most of the time or have long queues if available.
Electricity is also available for few hours a day. Power shortages have been unavoidable because of low water levels at Kariba Dam.
The electricity situation has been worsened by the problems in the alternative source of power.
Zimbabwe’s thermal power stations at Hwange, Bulawayo, Munyati and Harare were supposed to fill the gap but they are plagued by regular faults, resulting in Zimbabwe generating less than 1,000 megawatts (MW) daily on average against a national demand of about 1 800MW at peak periods.
To cover for the shortfall, enough extra power was expected to be imported from regional suppliers especially Eskom of South Africa and Hydro Cahorra Bassa of Mozambique.
But Zimbabwe is struggling to pay its debts to the South African and Mozambican power utilities resulting in Harare getting limited power supply.
Rolling power outages are crippling what is left of Zimbabwean industry. Many factories use diesel powered generators, which are expensive to run.
Captains of industries are now calling for a new economic blue print that addresses their concerns. Another problem is that the majority of Zimbabweans will soon struggle to eat one meal a day because of the deteriorating economic conditions, according to a recent report by the World Food Programme, a United Nations agency. Inflation is also ravaging the economy. Annual inflation is hovering around 500%, according to estimates by independent economists.
The government blames sanctions imposed by the United States and its Western allies as the source of Zimbabwe’s economic troubles. Though the sanctions have been unkind, many analysts believe the mess in Zimbabwe is mostly man-made.
The ‘Zimbabwe is open for business’ mantra, had brought hope the economy would come out of the doldrums and grow but little or insignificant infows have been recorded to date.
Instead, Zimbabwe still remains economically isolated and there is serious erosion of investor confidence which has seen the country losing phenomenal ground in terms of development.
This means, the new blue print might provide an opportunity for reconstruction and transformation of the economy which is capable of creating opportunities.
The transformation might require the fixing of broken relations and building bridges with cooperating partners both local and international.