Rebuilding Zimbabwe’s economy will be central to its restoration

Zimbabwean President Robert Mugabe’s resignation would open the door for whoever walks through it to bring massive economic relief to a country desperate for change.

That is according Dr Martin Rupiya, executive director of The African Public Policy and Research Institute based in Pretoria. “It’s all about the economics now,” Rupiya said.

“People are suffering, they want food on the table, so you deal with the economics and the rest should fall into line. “They are desperate; the pitiful existence of pensioners; people sleeping in queues outside banks because they cannot draw cash; the banks are printing bond notes,” said Rupiya.

“So, the economics are important for any interim regime which is put into place to fully engage with the international community. We need huge injections of cash to bring normality to the country.”

Once deemed Africa’s breadbasket, Zimbabwe’s once-thriving economy has been gutted, its currency has collapsed and even though it has turned to the US dollar, there’s not enough of it circulating to serve people’s needs.

The economy became the laughing stock of the world when the central bank printed 100 trillion-dollar notes in 2008 and inflation topped 500 billion percent.

“Unlike the hyperinflationary episode of 2006-2008, the authorities do not have the option of abandoning a domestic currency to bring an end to rampant price growth,” BMI Research said. “We believe only significant economic and political reform will help to bring price growth down.”

So what will it take to jumpstart the economy? Chief economist at economist.co.za Mike Schussler said: “Get business-friendly policies going and install property rights again for all.

The government must take a step back from running everything and allow business to get on with the job. Instil confidence with good leadership; technocrats and professionals, rather than party officials.

“Allow farms that no longer produce to get the old owners back so that production can start. And free up the economy by allowing competition. And allow free media; allow a free and fair election to get consumer confidence to make a comeback,” Schussler said.

Investors had been badly burnt in Zimbabwe and were not in a hurry to return.

“There may be some mining and farming, but confidence plays a large role here. “So, help normal people to be normal. Get schools and hospitals operating again.”

Wearing rose-tinted spectacles in the assumption Zimbabwe’s economy would start booming, the knock-on for SA would also be positive, Schussler said.

“If SA also learnt and grew like Botswana, along with Zimbabwe, we would today be a region where triple the number of investors want to be – if not ten times as much.

“Just think: to have extra flights between the countries and more tourists from outside the region. If both SA and Zimbabwe can instil confidence, we would both attract more foreign investors and professionals.”

– amandaw@citizen.co.za

//