After the budget presentation by Finance minister Patrick Chinamasa that amended the indigenisation law to reassure investors, re-engaged with global lenders and curbed profligate spending — all issues on the top of the opposition wish-list — analysts said the opposition strategists must be scratching their heads.
Chinamasa presented on Thursday Zimbabwe’s final budget for 2018, which highlights the first fiscal policy direction move of the new administration past Robert Mugabe’s presidency, suggesting stronger cooperation with the international community.
The national budget was presented under the banner: “Towards a New Economic Order” and acknowledges that a decline in domestic and foreign investor confidence has led to a disappointing economic performance over recent years.
The new policy shift highlighted in the final budget paper focuses therefore on economic recovery, supported by foreign direct investment under a market economy principle.
On the expenditure side, the focus was on ruthless cuts and austerity to try to reverse the ruinous deficits that the government has been running.
The big move was on the Indigenisation and Economic Empowerment Act of 2009, which required all companies operating in Zimbabwe to be 51 percent or more owned by black Zimbabweans.
Chinamasa said that the indigenisation policy will henceforth apply only to diamond and platinum mining.
Apparently, taking a cue from his principal, President Emmerson Mnangagwa, Chinamasa announced a raft of economic changes that also included retiring civil servants over 65 years as well as collapsing jobs of over 3 500 so-called youth officers.
The Finance minister said all civil servants older than 65 will have to take retirement, and a freeze on civil service recruitment will be kept in place.
Former MDC leader Morgan Tsvangirai’s advisor during the inclusive government era, Alex Magaisa, said Chinamasa budget reflects the thinking in the opposition.
“Indeed, opposition strategists must be scratching their heads because the budget statement could well be a part of their manifesto as it carries a number of issues that would be at the top of the opposition wish-list,” Magaisa said.
“Reading through the budget, it’s as if the new Mnangagwa administration is a former opposition party that has taken office after the Mugabe administration.
“The budget statement chronicles the ills of the Mugabe administration that the opposition has always raised in the past and promises to deal with them.
“The challenge, of course, is in the implementation. If the new administration fails to live up to its undertakings, the opposition will still have good ground to stand on in their campaign.”
Stephen Chan, a professor of world politics at the School of Oriental and African Studies at the University of London in the United Kingdom, said the budget is a good start and could in the long term attract investors and help ending unemployment which currently hovers around 90 percent.
“This is a good budget within its limits. Chinamasa had very little room in which to move but it remains to be seen whether the budget will attract investors,” he said.
“The investment has to come very fast or there will have to be another print run of bond notes — and that will in itself destabilise any sense of optimism among possible investors.
“There is no quick budgetary fix possible from either the government or the opposition. And Chinamasa has got to find a way to pay the $9 billion arrears owing the IMF before any, almost certainly very strict IMF ‘rescue package’ can be negotiated.”
Chan said that such a rescue package that the opposition has in the past promised to secure will demand public sector job cuts.
“Basically, Zimbabwe now faces the legacy of the later Mugabe years when people thought the economy was something to loot, while playing party politics and succession games,” he said.
In 2012, MDC leader Morgan Tsvangirai outlined his economic revival plans that included, trimming government expenditure, slashing the wage bill, privatising parastatals, slashing foreign travel, re-engaging western governments, repealing the Indigenisation and Economic Empowerment Act, eradicating corruption and sacking ghost workers something that Chinamasa did with finesse in his budget presentation
Political analyst Maxwell Saungweme said ahead of next year watershed elections, the opposition has to come up with better economic blueprints that go further in addressing the country’s urgent needs.
“The opposition needs to re-brand itself now that Mugabe is gone. The ‘Mugabe must go’ mantra no longer has buyers. Now that the regime has embraced neo-liberal economics, the opposition can no longer ride on this. It is a good lesson for them.
“They have to start focusing on real issues, to remove a Zanu PF governance patronage system, not individuals. They have to go back to basics and sell pro-poor economic blue prints.
“They can also still ride and peg their campaigns on human rights issues, as the regime does not seem keen at addressing human rights abuses,” Saungweme said