Tsvangirai’s Report Card on the economy

ZIMBABWE’S government of national unity has limped towards 100 days in office, and the Prime Minister has just launched a second phase 100-day agenda which is said to provide a blue print for the implementation of key sector reforms and the initiation of essential development and rehabilitation programmes.

Judging from the programme(s) crafted around this 100 day plan, it appears the new government considers this an important landmark. So how has the government performed in that period on economic revival?

The purpose of this short article is to weigh in on this debate, perhaps use a red pen to tick the boxes and produce a ‘Report Card’ on the Prime Minister who has vicarious authority over the implementation of the turnaround process by the new government.

As usual, there has been varied opinions on the matter, whilst some reviews have been positive, some have described the period as ‘100 days of failure’. Others have cautioned the government to get on with the job and stop obsessing over the 100 day action plan.

I must also admit that a second 100-day agenda seems curiously unorthodox. Nonetheless, if the intention is to track and monitor government performance, that would seem to be a plausible, though unconventional approach to increase ministerial efficiency and accountability to the public.

Being a party premised on the ‘change phenomenon’, the MDC would be under more pressure from the public to deliver some sort of tangible and measurable results towards public service delivery compared to its Zanu PF counterparts.

Setting aside political posturing from both parties, and piercing through the spin, we must look at the inclusive government’s progress and performance against set objectives and the MDC’s previous pledges. We can also look at the total the government is seeking to raise against how much money is in the bank?

Based on that limited criterion (which of course is inconclusive) we can muse ourselves with how to rate the Prime Minister’s performance and consider what Tsvangirai’s Report Card on the economy would look like.

Based purely on information available in the public domain, we know that the new government has claimed credit for the following stabilisation efforts and economic achievements;

• - Curbing stratospheric inflation since dollarisation. Official figures showed inflation at 231 million percent in July last year. Recent official data from the Central Statistical Office showed inflation at -3 percent on a monthly basis in February and -2.3 per cent in January 09. The last time official figures showed a month on month fall in inflation was in mid-2005.
• - The Finance Minister has led an initiative to raise $8,3bn that the government says it needs to shore up the mining, agricultural and banking industries. Although full international support has been elusive, neighbouring countries have already pledged $400m to help Zimbabwe’s economic recovery. The credit lines were extended by the Common Market for Eastern and Southern Africa, the regional trade bloc, as well as South Africa and Botswana.
• - The International Monetary Fund (IMF) recently announced that it would resume technical assistance to Harare offering targeted help in key areas such as tax policy and administration, payments systems, banking supervision and central banking governance.
• - The World Bank also announced that it was to give Zimbabwe $22 million and made future promises of further cash injections if the country cleared its long standing arrears to qualify for aid. (This was however subsequently denied by senior bank officials)
• - The latest and rather contentious cash lifeline of $250m came from Cairo-based African Export-Import (Afrexim) Bank, while $178m was offered by the Eastern and Southern African Trade and Development (PTA) Bank based in Nairobi.
• - Quasi Fiscal Activities were terminated, the financial system, including the Stock Exchange, was dollarised.
• - The Minister of Finance introduced the Short Term Economic Recovery Plan (STERP) to guide the economic recovery process.

An assessment of these numbers seems to point towards modest progress. In monetary value, the new government raised approximately 20 percent of the targeted $8,3bn in its first 100 days, laid out a blue-print for recovery and started the re-integration of Zimbabwe into the world economy after more than a decade as a pariah state.

Whether these achievements are good enough to score an A or F on Tsvangirai’s Scorecard is a matter of public debate, in my opinion however, the GNU appears to have made good progress from which stabilisation efforts can be implemented and a sound economic architecture constructed. Needless to say, most analysts would have expected more.

But of course there are a number of negatives; multilateral donors have remained on the sidelines and requested more democratic reforms towards restoration of rule of law and respect for property rights, targeted sanctions are still in place; failure to resolve outstanding issues under the GPA remains a threat to the longevity of the government with serious consequences on political stability.

The escalating conflict between the Finance Minister and the Governor’s office which descended into shameful sleaze, blackmail and an exhibit in extortionism has been regrettable. The economic revival process will not necessarily be helped by who has what dirt on whom. If it were, the central bank would be an unchallenged winner.

The most interesting of these minimalist slinging matches has been who should get the credit for what achievements? The Prime Minister and his new team can rightfully claim that such progress could not be achieved without them. Those aligned to the previous government such as the Governor and the Interim Finance Minister Patrick Chinamasa have also claimed, quite plausibly, that some of these achievements were due to their previous efforts.

In particular, the Governor has laid claim to 99 % of the content in the STERP document as his recommendations in a letter to the PM recently leaked to the press. The Governor also argues quite persuasively, that the $300 secured from Afrexim Bank was based on negotiations he initiated and concluded in December 2008.

The previous government has also argued that they were the architect of dollarisation. Whilst I will leave the job of analysing who should be given what credit to the numerous political commentators, what is perhaps clear is that the timeline of the progress was after the GNU was inaugurated.

Going forward, it is important that the new government’s performance should be measurable against set objectives to avoid a repeat of that previous cabinet referred to by the President as ‘the worst in history’. The abstract concept of government performance can only be an effective tool in public debate where there are concrete statistics measuring performance and benchmarks against which current indicators can be compared.

The GNU should consider the approach introduced by Jacob Zuma in his National Planning Commission, charged with monitoring and evaluating performance of all three spheres of the SA government, national, provincial and local. It may prove essential to have a planning office responsible for monitoring and evaluating ministerial performance, resource allocation and project delivery.

The new government should not only encourage more emphasis on results in internal administrative arrangements, they must also show external audiences that they are conscious of the need to measure their effectiveness. Better data about performance would allow central agencies and political executives to make better decisions about the allocation of scarce resources.

Performance measures could also be used as a new instrument for holding the managers of public programs accountable. Using a performance driven approach, in future no Governor or Minister should expect to remain in office after presiding over 231 million percent inflation rate, regardless of who their principal is.

Tsvangirai’s Report Card on the economy may not be an A+ but in my opinion if I were to borrow the terminology of Mr Mutukumira, my Grade 7B English teacher at Nhowe Mission, my comments would be ‘There is certainly room for improvement’, or ‘He can do better if given the right support’.

Regardless, the most positive outcome out of the inclusive government could be that the main parties will hopefully start to compete for people’s votes in the next general election based on their performance than their capacity to unleash violence.

Lance Mambondiani is an Investment Executive at Coronation Financial. The view expressed in this articles are personal and do not necessarily reflect the position of Coronation Financial. To join the discussion on this article visit Lance’s blog or his facebook discussion forum. He can also be reached on coronation.uk@btinternet.com

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