Small minds that run Zimbabwe's economy

Small minds that run Zimbabwe's economy

RESERVE Bank governor Gideon Gono

• Zimbabwe dollar depreciates by 4 percent

• Inflation accelerates once again

• Gono predicts inflation to fall to 20%

• Zim fools no-one with 9% unemployment claim

• Zim claims on lowered inflation unconvincing

• House prices bite Zimbabwe's poor

• Reserve Bannk cautions against paying ex-political prisoners

• $200bln windfall for ex-political prisoners

• Zimbabwe's inflation seen dipping to 160%

By Patrick Mlambo

I HAVE been watching the transformation of our economy from the early 90s to date and it appears to me that one thing is clear about our economy – there is a perpetual interest in remaining small, a lack of patience to learn the patient cultivation of profit, and a wish to perpetually expect ‘others help us’.

My first major concern was the closure of the Feruka oil refinery in Mutare. This refinery had been refining crude oil for many years, and to date is functional, but simply unused. When one looks at it with economic eyes, one finds a massive plant worth billions in today’s Zimbbawe currency, a plant that employed many people working and producing not just petrol and diesel, but also other oil products, all of which the country now imports and expects those in diaspora to help finance through the little foreign currency they send home.

The refinery represented in my opinion, a desire, by whichever government was in power when it was commissioned, to make Zimbabwe, Zimbabwe-Rhodesia, or Rhodesia, or worse still Southern Rhodesia self-sufficient in the production of petroleum products. And this desire to achieve self-sufficiency has since been dealt a blow by the closure of the plant and the importation of refined petroleum products. All Noczim wants is a Petrozim to mann the pumping process from Feruka to Msasa. All the other work is now being done by people in countries from which we import the fuels. We could have been procuring the crude oil cheap, and using our own people to mann the machinery which would have been bringing a lot of food to our people. We could have been exporting petroleum products to neighbouring countries and would have been receiving the much-needed foreign currency in return.

My second concern is about power generation for the country, which I think has been badly managed for far too long and it now appears that we are resigned to the fact that we are at the mercy of power exporting countries within the region. As such, the message we preach to our people is that they should treat it as normal to be subjected to power blackouts anytime by the power utility. We have Hwange power station. It does not produce enough. We have Kariba and it too does not produce enough. We have coal deposits around the country, but no further power stations. I vividly remember that during, the colonial era, there were power stations on small rivers such as Rusitu in Chimanimani and Chipinge and those small power stations fed into the national grid. That was way back when we had less factories and far less houses with electricity in the cities. But the guys who ran the country then were aware they had to be self-sufficient, and they had those small power stations.

"Folks at the PTC – it is about more lines, rather than higher tariffs per minute. The world over, calling rates are going down as we speak, not up"

PATRICK MLAMBO

Now, we don’t have any such smaller power stations and we have no plans to have them either. All we hear about is ZESA’s wishes to increase prices without any betterment of services. This is the height of irresponsibility for any company and it means only one thing – there is no competition, and never will there be. We are a sovereign nation and I don’t see why we cannot have any further power stations around the country be they coal fired or water powered. We expect our neighbours to assist – till when? Now the Zesa spokesperson is quoted on New Zimbabwe.com as saying: "The region has run out of power to export to countries such as Zimbabwe." This nevertheless does not mean anything to ZESA. The utility has no plans to invest in new power stations and yet it is as clear as mud that the exporting countries have their own worries and will only export when they have sufficient power for their own countries. Their economies are also growing and they will need more power for their own use. This situation is terrible.

As if the above is not enough, we also have the PTC (call it what you may – telone, netone, whatever – to me it is the same old PTC). It amazes me that to date this utility still has waiting lists of people wanting telephone services and the same old answer to why people cannot have lines is ‘because we haven’t got the capacity to provide additional lines’. This is nonsense. They therefore continue to increase tariffs on the existing subscriber base and lie to us that they have made profits when they are making losses everytime and only smooth them out by hiking tariffs. Elsewhere profit comes from more unit sales rather than price hikes. The CEOs cannot press their boards for money to finance the expansion of their exchanges so they may have more subscribers who would in turn provide more revenues for the telephone utility. It drives me nuts because this should not be that difficult. Folks at the PTC – it is about more lines, rather than higher tariffs per minute. The world over, calling rates are going down as we speak, not up. Why are they going up always in Zimbabwe? We want more lines because the market is there but no one but the PTC has the power to do that – They want to remain small but have more money – this is shameful.

From the foregoing, one can see that we are wasting our foreign currency on utilities that should be earning foreign currency for Zimbabwe. These will remain very big holes in the country’s pockets unless the government does something about them. They should create their own foreign currency. No one needs to be told that any economy nowadays requires better telephone infrastructure than before. It’s all about communication and without it, you are dead. Some journeys that people go on in Zimbabwe right now would be avoided if the telephone infrastructure was ok. You would have less people at filling stations because they would be able to communicate via the wire and avoid the costly journeys. Businesses don’t need power blackouts, and they don’t need to wait for long periods to get telephone lines connected either.

To the ministers responsible for the above utilities, I say, let heads roll if the Chief Executive Officers of those utilities do not have any new ideas about how they can change their utilities’ fortunes. Consumers want service, not perpetual tariff hikes. It is such a pity we crave to remain small. We not only remain small. We further break up our small utilities into smaller companies that deliver nothing more than the original small utilities delivered. However, we create chances for the even smaller utilities to have CEOs driving mercs, FD’s and the like where we could have been ok with just one CEO. This restructuring paradigm has cost us so heavily, but it has given noone the advantages promised. If these utilities don’t change and expand, we are doomed. It is a fact.
Patrick Mlambo is an economy analyst and a regular contributor to New Zimbabwe.com
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