Back to Index

New plan for Zim economy
Chris Muronzi, Fin24
August 17, 2007

http://www.fin24.co.za/articles/default/display_article.aspx?Nav=ns&ArticleID=1518-25_2166645

Harare - Zimbabwe will soon launch a new economic revival plan aimed at ending the troubled country's years of economic meltdown.

A new economic blueprint, known as the Zimbabwe Economic Development Strategy, will be launched next Wednesday, according to government officials on Thursday.

The launch of the blueprint was scheduled for Thursday but was inexplicably postponed due to - what some believe ? is the ongoing Southern African Development Committee (SADC) in Zambia.

This comes a year after yet another economic plan, the National Economic Development Programme (NEDPP), embarrassingly failed to yield any positive results.

Insiders say Mugabe could have accessed a US$2bn loan from Libya for the turnaround of the economy and might be using the loan as a basis for the new economic plan.

Mugabe plans to step down

Mugabe is said to be planning to step down when Zimbabwe's economy stabilises. Once the economy is stable Mugabe will seek a dignified exit from the helm after 26 years.

The US$2bn will guarantee key imports such as energy, particularly fuel and electricity, among other key requirements Zimbabwe is grappling with.

The troubled southern African nation is facing an acute shortage of foreign currency exacerbated by a negative Balance of Payments Position (BOP) after the International Monetary Fund (IMF) withdrew such support when Mugabe refused to play by their rules.

Below are some of the salient features of the new economic plan according to a leaked document published in an independent newspaper a few days ago as the 13-point plan.

a. Mobilise a specific amount of foreign currency to stabilise the exchange rate and ensure sufficient importation of food, fuel and inputs to agriculture and industry;

b. Create a primary budget surplus (i.e. surplus before interest payments.);

c. Put in place a credible, transparent pricing mechanism that ensures both business viability and affordability for consumers for controlled and monitored products through the framework from the social contract;

d. Remove all pricing misalignments including those for foreign currency;

e. Finalise the land issue and investment laws so as to create a climate conducive for investment;

f. Finalise the issue of security of tenure in agriculture so as to increase agricultural output thereby stimulating production and economic revival;

g. Rehabilitate key infrastructure such as water, roads, power and coal;

h. Mobilise/launch national housing initiative to clear backlog in housing and create employment;

i. Stem exodus of skills by putting in place appropriate legislative and other measures;

j. Reform and restructure public enterprises; and

k. Once the internal package of measures achieves traction, leverage this to seek external balance of payment support on favourable terms.

A Herculean effort needed

But President Robert Mugabe's critics say turning around the country's economy will be a Herculean task given its apparent lack of political will.

Others believe that this could be Mugabe's attempt to win the hearts of the electorate ahead of March presidential elections.

A number of economic development plans have been launched over the years but have achieved little to nothing.

If anything, the economy has sunk deeper into recession after years of ruinous economic policies.

The IMF estimates that Zimbabwe's gross domestic product has shrunk by over
60% in the last seven years and has predicted that the economy will shrink further this year.

The country has the highest inflation rate in the world - believed to be above 4 500% in April - while over a third of the country's population is facing starvation owing to recurrent droughts and a disastrous land reform exercise.

Please credit www.kubatana.net if you make use of material from this website. This work is licensed under a Creative Commons License unless stated otherwise.

TOP