18 July 2002

Makoni: Not enough political will to tackle Zim’s crisis

Finance Minister Simba Makoni this week acknowledged that there was not enough political will to implement measures to lift Zimbabwe out of its economic crisis, saying the government had so far not fully and effectively implemented its own recovery blueprint, the Millennium Economic Recovery Programme (MERP). Highlighting widening rifts within the government on how to resolve the crisis, Makoni insisted that a fixed exchange rate, apparently supported by President Robert Mugabe and radicals in the ruling Zanu PF party, was an unworkable policy option. "I think there has not been the extent of political will necessary to make our plans work to full effect," Makoni told the Financial Gazette in an exclusive interview. "We are implementing some plans very effectively but some we have not fully implemented and the result is a sub-optimal outcome," he said.

Makoni, who spoke amid growing speculation that influential Zanu PF politicians were ganging up to oust him from the finance portfolio, said while MERP was a long-term programme the plan was not working fully yet. He gave as an example the failure to normalise relations with key international donors, trading and development partners, which is one of the pillars upon which MERP is built. "Our path is littered with many plans that are not being implemented. What we need most is willingness to implement these plans. And if we had implemented even half of the things proposed under MERP, our country would be somewhere very different from where it is now," the minister said. Zimbabwe’s relations with the international community are strained, with Mugabe and his top lieutenants such as Makoni under targeted sanctions imposed by the European Union, the United States, Canada, New Zealand and Switzerland over the government’s controversial land policies and bloated human rights record.

Makoni, a top flight business technocrat before being recalled into the government by Mugabe to plot a survival plan for the crumbling economy, said some of the measures implemented under MERP such as supporting the productive sectors and ensuring that the government lived within its means had achieved some success. He insisted he still had the ear of the government as its finance minister despite the growing crusade against his policies. He dismissed calls by hawkish Information Minister Jonathan Moyo for the government to ban foreign currency bureaux and foreign currency accounts and to centralise the management of all the hard cash in the country. Makoni said only himself as the responsible minister had the prerogative to announce such measures if and when adopted by the government.

Describing his disagreements with Cabinet colleagues over the exchange rate as a major point of departure, Makoni said he would still try to convince the government to change its fixed exchange rate policy. Three weeks ago, Zanu PF’s central committee threw out recommendations by Makoni and central bank governor Leonard Tsumba to devalue the local dollar, opening floodgates for several other Zanu PF chiefs and academics linked to the ruling party to mount a startling attack on the minister and his economic stewardship of Zimbabwe.

Meanwhile, the forcible occupation of white-owned farms in Zimbabwe had contributed to the deepest economic crisis in the country's history, the United Nations (UN) warned yesterday in a damning report. "Zimbabwe is currently a crumbling economy facing a grave crisis," the UN Economic Commission for Africa said in its annual overview of the economic health of states on the continent. "The land issue is at the heart of Zimbabwe's national economic crisis," it said, adding that President Robert Mugabe's government showed a "tendency for inconsistency. Land redistribution should go hand in hand with good governance to protect output and jobs". "The economy has been contracting since 2000 and the outlook for 2002 shows an increasing incidence of food insecurity, poverty, inflation and worsening balance of payments." Zimbabwe "is facing the worst crisis in its history", said Patrick Esea, the director of the commission's economic, social and political division. The report said the occupation of farms, coupled with poor weather conditions, had led to "the lowest agricultural performance in recent years".

In May Zimbabwean Finance Minister Simba Makoni said the country's overall economy shrank by 7,3% in 2002, while the agricultural sector suffered a decline of more than 12%. The commission's report projected negative growth of 5% for 2002 and noted that 75% of the country now lived in poverty. It explained that a sharp decline in exports and inflation had undermined financial stability and prompted dramatic capital flight. (ZWNEWS / Financial Gazette, Business Day, SA)


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